The first pension funds in Italy have committed to the fund of funds (FoF) for infrastructure investments, the third leg of the Real Economy Project (Progetto Economia Reale) launched by Assofondipensione in partnership with Cassa Depositi e Prestiti (CDP), the partly state-owned investment bank, and asset manager Fondo Italiano d’Investimento.
Arco, the pension fund for workers employed in the wood, furniture, forestry, brick and concrete sectors, and Concreto, the pension fund for workers in the cement and construction material industries, have invested a total of €15m in the infrastructure FoF, Giovanni Maggi, president of Assofondipensione, told IPE.
CDP has committed €300m to the FoF, and potentially the same sum will be raised through other pension funds.
An initial target of €200-250m was set three years ago, however, Maggi is optimistic about the fundraising as pension funds members of Assofondipensione have pushed to establish the infrastructure FoF.
“I don’t see why they would pull back. It would be another positive signal. These are assets invested in Italy, domestic FoF funds (private equity, debt and infrastructure),” he said.
Maggi noted that 18 pension funds – 16 industry-wide pension funds and two pre-existing pension schemes – have invested in the other two legs of the Real Economy Project, the private equity FoF and the private debt FoF, for a total of around €1bn, with the co-investment of CDP. He had previously stated the FoFs raised €800m.
Pension funds in Italy can invest up to 20% of their assets in private markets, but on average they invest much less.
Assofondipensione has asked the Ministry of Economy and Finance (MEF) to introduce a special tax regime for investments conducted by pension funds with CDP, supporting firms in Italy.
“Returns are taxed at 20%, and sadly we have not been heard [by the MEF]. We will continue to push for a special tax regime. These are pension assets, there isn’t a speculative fund bringing home the benefits [of the investments],” he said.
The parliamentary committee in charge of the activities of social welfare institutions has started an audit on pension funds’ investment policies, with members of parliament trying to figure out ways to boost schemes’ investments in Italy,
“I hope that we will be called by the parliamentary committee. It is important to discuss the issues of member numbers, which are too low in the second pillar, and tax,” Maggi said.
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