Inarcassa, the pension fund for self-employed engineers and architects in Italy, has reshuffled the allocation of its global government bonds portfolio by decreasing the share of those linked to inflation, in favour of nominal value bonds.
The scheme said in a note that it had reviewed the portfolio to realign the weight of bonds to its strategic asset allocation (SAA).
Bonds still represent a major allocation of the scheme’s total assets, set at 35% of its SAA, but real economy investments are increasing, at 20% of total assets, with allocations to real estate having gradually decreased, said Roberto Lamonica, the fund’s new chief investment officer, speaking before the parliamentary committee investigating first and second pillar pension funds’ investment policies.
The scheme invests €2bn in government bonds, mainly in Italian fixed income, he added.
Inarcassa’s investments in private markets at the end of 2023 were made of over 160 investment funds, for an invested capital of over €2.6bn, against actual commitments of more than €3.3bn, the scheme said in its 2023 report.
More than 80 investment funds for private market investments focus on Italy, with 50% of the capital committed to the domestic market, the report added.
Inarcassa committed over €600m in private markets last year, and approximately 40% of the sum was allocated to private equity, private debt and infrastructure funds also focusing on domestic markets.
The funds have invested, through equity or debt, in over 700 small, medium and large Italian companies, generating more than €100bn in turnover, it added.
Inarcassa’s asset allocation is structured to invest in domestic markets across asset classes including governed bonds, real estate and equities, general director Alfredo Granata added speaking before the committee.
Granata added that supervisory authorities are assessing “a rather significant regulatory change” to increasingly link the evolution of “capitalization rates applied to the amount of contributions to the performance and return of assets,” to safeguard the financial stability of the scheme.
At the end of June, Inarcassa’s total assets under management at market value stood at approximately €14.5bn, cashing in approximately €400m as a result of positive developments in capital markets, it said.
The scheme has increased allocations to global equities with a focus on the tech sector, and made new investments in Italian green bonds, it added.
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