Eurofer, the €1.45bn Italian railway workers’ pension scheme, has removed Amundi’s total return mandate in its ‘Bilanciato’ sub-fund, while reviewing the strategic asset allocation (SAA) of its ‘Bilanciato’ and ‘Dinamico’ sub-funds.
The scheme’s decision stems from “unsatisfactory results”, an issue that persisted “in the limited ability to protect during phases of downturns”, without identifying investment opportunities when markets recovered, it said in its 2023 annual report.
The scheme’s board of directors has decided to reallocate the total return assets to other mandates, it said, adding that its new SAA sees the fund’s exposure to equities in the ‘Bilanciato’ reduced in favour of government bonds.
Additionally, the fund has changed the benchmark for bond investments in its ‘Dinamico sub-fund’ from a global government to an aggregate global benchmark, the report added.
Eurofer plans to allocate 10% of its ‘Bilanciato’ and ‘Dinamico’ sub-funds assets to alternative investments. It has selected bfinance to prepare an alternative investment programme, and to select investments in private equity secondaries, it said.
Mandate changes
At the same time, Eurofer has renewed mandates for a further three years with AXA Investment Managers, BlackRock, DWS, Eurizon Capital, and Lazard Asset Management to run the assets in its ‘Bilanciato’ sub-fund.
AXA IM holds a €281.79m global bond aggregate mandate, while BlackRock and Eurizon run a semi-active multi-asset brief, worth €283.64m and €148.24m, respectively.
DWS holds a €101.32m global developed markets passive equity portfolio, and Lazard manages a €114.35m active small-cap global equity mandate investing in developed and emerging markets, according to the report.
Some €410.46m from Amundi’s terminated mandate will eventually be reallocated within the scheme’s ‘Bilanciato’ sub-fund, which counted €988.37m of total assets at the end of 2023.
Additionally, Eurizon and Lazard saw their small-cap semi-active multi-asset and active global equity mandates, which invest in developed and emerging markets, be extended for a further three years. The mandates are part of the Eurofer’s ‘Dinamico’ sub-fund, with assets worth €220.29m at the end of 2023.
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