Romania’s second and third-pillar pension funds have become the country’s biggest local institutional investors and a major force in the stock market, according to an analysis published by the Romanian Pension Funds’ Association (APAPR).

As of the end of 2014, the funds had €753m invested in 35 companies listed on the Bucharest Stock Exchange (BSE), compared with €426m a year earlier.

By the end of March 2015, the total investment had risen to €824m.

The stock exchange investments include companies deemed of strategic national importance, in sectors such as energy, finance and pharmaceuticals.

At the end of 2014, the biggest holdings were in closed-end fund Fondul Proprietatea (RON639.1m; €143m), Romgaz (RON497.3m), Banca Transilvania (RON430.2m), OMV Petrom (RON354.5m), Electrica (RON287.7m), Transgaz (RON261m) and Transelectrica (RON170.2m).

According to APAPR’s analysis, these seven companies are held in the portfolios of all the seven mandatory second-pillar and 10 voluntary third-pillar funds.

Currently, the funds have nearly €5bn in assets, of which some 20% are invested in listed shares.

Of these, some 85% are Romanian stocks listed on the BSE, the remainder being other EU companies.

The APAPR also reported that the second-pillar funds, which started collecting contributions in 2008, had since generated an average annualised return of 11% as of end-March 2015.

The third-pillar funds, in place the previous year, generated 8.1%.

According to Romania’s Financial Supervisory Authority, the second-pillar funds increased their two-year weighted average return as of end-March to 9.44%, from 8.5% 12 months earlier.

Membership grew by 4.1% year on year to 6.37m, and net assets by 38.7% to RON20.6bn.

Asset growth this year will be boosted by a 0.5 percentage point increase in the contribution rate, to 5%.

In the much smaller third pillar, membership grew by 11.3% to around 356,200, and net assets by 29.8% to RON1.1bn.

Returns for the high-risk funds increased from 8.35% to 8.86%, and those for the medium-risk ones from 8.24% to 8.87%.