Inarcassa, the pension fund for self-employed engineers and architects, is pressing on with its allocation to illiquid assets, namely private debt funds, it said in a note.

The private debt investments focus on financing Italian small and medium-sized companies. The allocation to this asset class confirms Inarcassa’s interest in profitable projects supporting the real economy, it said.

Inarcassa’s board of directors has decided to slightly reduce its allocation to US equity in favour of corporate bonds.

The pension fund, which had approximately €12.2bn in assets under management at the end of May, recorded a gross operating return in the first quarter of this year of over 2.5%.

Journalists fund to invest in real assets

The pension funds for journalists, Fpcgi, is looking to invest in its first Alternative Investment Funds (AIFs).

Fpcgi plans to allocate up to €26m to private debt, up to €30m to infrastructure with a main focus on Italy, up to €20m to private equity also with a main focus on Italy, and up to €20m to global private equity with an European focus, it said.

The AIFs could invest in private corporate debt through debt and credit securities of unlisted issuers, the fund said, adding that the investment funds should pursue direct lending and senior loan strategies.

The AIF infrastructure fund should target transport, networks, health services, education and energy sectors, with at least 75% of the investee companies located in Italy.

For the private equity investment with an Italian focus, the AIF can adopt buy-out and growth capital strategies, while the share of venture capital investments should not exceed 20%. In this case, too, 75% of the investee companies have to be domiciled in Italy.

The AIF for global private equity can also adopt buy-out and growth capital strategies, while the quota of venture capital investments should not exceed 25%, and at least 50% of the companies need to be based in Europe.

Institutional investors turn to ESG

Over half (56%) of Italian institutional investors adopt sustainable investment policies, according to a survey part of a study on ESG policies conducted by Itinerari Previdenziali.

The study also showed that 97% of the institutional investors surveyed that have not yet adopted ESG policies, plan to include them in their strategies in the future.

It also revealed that institutional investors opt mostly for exclusion strategies (67%), up 2% year-on-year in 2021. Exclusions mainly target arms products (89%). Impact investing has jumped from 31% in 2019 to 48% this year.

Investors prefer social and green bonds (62%), social housing (55%) and microfinance (34%) for impact investing, it added. It also disclosed that institutional investors have instead decided to use less thematic investment strategies, 44% this year compared with 46% in 2020, and best in class, which saw a reduction from 50% in 2020 to 44% this year.

They increasingly choose to use a hard engagement approach, involving interventions in shareholders’ meeting or exercising voting rights, up to 22% this year from 8% last year.

The study screened 79 institutional investors managing total assets of over €182bn, including 19 industry-wide pension funds, 16 pre-reform funds, 14 pension funds, 16 banking foundations and 14 insurance companies.

Pegaso’s positive dinamico performance

Fondo Pension Pegaso, the second-pillar pension scheme for employees of Italian utility companies, has recorded a 5.32% return for its dinamico fund in 2020.

Its bilanciato fund returned 2.47% while its garantito recorded a 0.25% return last year, according to the pension fund’s latest financial statement.

The dinamico fund is split into 51% equities and 49% bonds, the bilanciato invets 31% in equities and 69% in bonds, and the garantito 98.5% in bonds and 1.5% in equities.

Pegaso managed net assets of €131.7m in its garantito fund, €959.9m in the bilanciato and €122.4m in the garantito fund, as of the end of 2020, according to the statement.

The fund – which totalled €1.2bn in assets under management as of the end of April of this year – is tendering a specialist, global active equity mandate for approximately €90m for a five-year contract to manage assets in its bilanciato fund, it said.

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