ITALY - The €970m pension fund of the Italian Banca Nazionale del Lavoro (BNL) is looking to outsource the management of its real estate portfolio.

Ergone Burrica, head of finance at the fund, told IPE managing the portfolio, in total 28% of the fund's assets, in-house could become too expensive in the future.

Burrica said the fund was considering whether to either create a separate company for the asset management of its real estate component, or to outsource it.

He added Italian funds enjoy general fiscal advantages of 0.5% on real estate assets.

He said BNP Paribas, which is in the process of acquiring BNL, would most likely take on the asset management of the portfolio, though the decision is yet to be made at the next board meeting of the fund.

Speaking at the annual IPE Awards in Vienna yesterday, Burrica told delegates following a review two years ago, the fund has already shifted most of its portfolios to external managers.

BNP Paribas and Credit Suisse already manage six balanced mandates, and two fund of hedge fund mandates are being managed by UBS and the EACM group, which was bought by Mellon in 2004.

The fund will also examine outsourcing its €25m high yield and €25m emerging market portfolios, Burrica added.

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