Previp, the €3.4bn Italian multi-employer defined contribution pension fund, has stripped Amundi of the asset management mandate for one of its sub-funds in light of poor results compared with AllianzGI, another sub-fund manager and competitor.
Previp’s board of directors selected AllianzGI and Amundi in 2023 to manage the assets of the Linea 3 Bilanciata, which at the time totalled €374m, according to the pension fund’s 2023 financial statement.
Assets under management were split almost equally, with €192m in the hands of AllianzGI and €182m invested by Amundi, while Previp reserved the right to compare investment approaches and returns against the benchmark.
Previp observed that returns on assets invested differed markedly, with AllianzGI’s strategy returning 12.06% since the beginning of the mandate, compared with the 11.78% benchmark, and Amundi’s strategy returning 8.37%, underperforming the benchmark, according to the financial statement.
Therefore, because of the results achieved and “the behaviour of the two (asset) managers”, in October Previp decided to reallocate the entire assets of the Linea 3 Bilanciata sub-fund to AllianzGI until its mandate expires, the pension fund said in the financial statement for 2024.
The investment strategy and management style adopted by AllianzGI since the start of the mandate in 2023 generated “a significant outperformance (excess return)”, both compared to the benchmark of the sub-fund, and “above all in relation to the performance achieved by the competing asset manager”, Previp added in the statement.
The Linea 3 sub-fund invests 30% of the assets in euro-denominated government bonds, 20% in euro-denominated corporate bonds, and 50% in global equities in developed countries hedged against exchange rate risk.
Assets in the sub-fund have increased to €443m, according to the 2024 financial statement.
AllianzGI also manages assets amounting to close to €2.5bn in Previp’s sub-fund Linea 1 gestione assicurativa garantita, which invests mainly in government bonds and corporate bonds with high credit quality.
The board of directors of the pension fund has decided to directly allocate up to a maximum of 6% of the assets of each of the four Previp sub-funds in private markets through alternative investment funds (AIFs).
The goal is to streamline the asset management process in the sub-funds by investing in private assets that can offer interesting returns over a multi-year period, and protect investments in the event of negative market performance, the pension fund said.
