ROMANIA - Investment in equities by the newly-established Romanian second pillar funds reached a record low of 2% by the end of October.

Equity exposure had been reduced from 9.5% at the end of May - since inception of the occupational pension sector - to 3.4% at the end of September, the Romanian supervisory commission CSSPP told IPE.

"The fund managers took measures in order to protect the Pillar II investments, taking into account the international financial crisis conditions", a spokesperson noted.

The Bucharest stock exchange dropped over 60% in value over the first 10 months of the year.

The vast majority of investments (67.8%) by pension funds are now in government bonds, while 16.5% are held in corporate bonds, 13.3% are in bank deposits and the remaining  in mutual funds.

83% of assets are invested in Romania and 17% in other EU countries.

Assets in the 14 funds reached RON598.5m (€156m) by the end of October, having grown by RON100m since September and RON512m since end-May.

Assuming a similar growth over the next two months, the system might yet reach the €224m-mark predicted earlier this year by market participants. (See earlier IPE article: Romanian pension assets to reach €224m by year end)

The number of participants is now 3.8 million, up from 3.2 million at end of May - the time before which all Romanians aged between 25 and 35 had to join and others could choose to do so.

Dutch insurer ING's Romanian pension subsidiary has by far the largest market share both in participants and assets with 34% and 39% respectively followed by AZT Viitorul (26% and 23%), a fund administered by Allianz-Tiriac.