Fonchim, the €8.42bn Italian pension fund for the chemical sector, has revamped the asset allocation of its ‘Garantito’ sub-fund after swapping Amundi with UnipolSai Assicurazioni to manage the €285.94m portfolio, mainly allocated to bonds, according to the scheme’s 2023 annual report.
The new asset manager has tweaked the sub-fund’s asset allocation, adding Italian government bonds and US equities to the mix, while also expanding guarantees for members.
UnipolSai is investing 5% of the portfolio’s assets in short and medium-term Italian government bonds, 2.5% in US equities, 2.5% in European equities, 65% in short and medium-term European government bonds (excluding Italy), 10% in long-term European government bonds, and 15% in short and medium-term European corporate bonds, the report added.
The manager has expanded member guarantees to receive contributions paid, including an earlier payout to purchase or renovate a first home, payments in instalments through a so-called RITA (Rendita integrativa temporanea anticipata) option, it added.
Amundi opted for an “extremely prudent” strategy during the last months of its mandate, with a limited average duration, gradually cutting its equities allocation, and growing liquidity.
UnipolSai is keeping a prudent approach at the start of its mandate, making investments in bonds with an overall duration lower than the reference parameter, holding a significant share of liquidity and underweighting equities, it added.
Picking Unipolsai came with a higher asset management fee of 0.48% per year on assets managed, compared to 0.20% paid to Amundi, according to the report.
Fonchim has opted to change its ‘Garantito’ asset manager as the average compound annual performance since 2007 was equal to 1.24%, and lower than the return accrued in the same period from the severance pay (trattamento di fine rapport, TFR) at 2.47% and the inflation rate at 1.82%.
The sub-fund aims to achieve returns equal or higher than the TFR over a multi-year period.
The low performance has confirmed, from an asset management standpoint, the challenges that a portfolio holding short/medium-term bonds faces over the long run, burdened by “significant guarantees”, the scheme said.
Fonchim has also reviewed the asset allocation of its other two sub-funds – ‘Stabilità’ and ‘Crescita’ – based on recommendations by advisor Prometeia SIM, adding €115m to invest in private assets, mainly in Europe.
The sub-funds will invest in private equity and infrastructure alternative investment funds (AIFs).
The latest digital edition of IPE’s magazine is now available
No comments yet