Fondo Pensione del Monte dei Paschi di Siena (MPS), the pension scheme for the employees of the world’s oldest bank, is seeking Alternative Investment Funds (AIFs) to invest €115-120m in private markets, readjusting the portfolio toward its strategic targets.

The scheme plans to invest €50m in a closed-end AIF allocating capital to infrastructure projects generating cash flows. The projects will focus on urban redevelopment, energy and environmental sustainability, and the provision of essential services including transport, networks, utilities, health services, and education, the scheme said.

The share of assets that can be invested in so-called greenfield projects cannot exceed 30%, according to a tender notice.

The infrastructure AIF must have existing investment commitments (hard commitments) by other investors of at least €400m to take part in the tender, it added.

The pension fund also wants to pick a closed-end AIF for private debt investing €25-30m, pursuing direct lending and senior loan strategies, with at least 75% in senior secured and first lien.

The AIF will exclude infrastructure and real estate debt, including collateralised mortgage obligations, while setting a 10% threshold for non-performing loans and distressed debt. The AIF should target a minimum fund raising of €1bn, the notice added.

Additionally, the scheme plans to invest €40m in a closed-end AIF for private equity investments (fund-of-funds), pursuing buy-out and growth capital strategies, investing in the primary or secondary market, it said.

The share of venture capital investments cannot exceed 20%, and the share of co-investments cannot exceed 30% of the assets of the fund. The AIF should have hard commitments of at least €300m to participate in the tender process.

The deadline to submit applications for the tender is 31 July.

In January, the pension fund selected Finanziaria Internazionale Investments, Tikehau Investment Management, and several others, according to its 2023 financial statement, following a search launched last November.

The selection followed the decision to realign the scheme’s private market investments to its asset allocation strategy.

Assets under management for the MPS fund amounted to €1.72bn at the end of last year, up by €245m compared with €1.48bn reached in 2022, according to the statement.

The scheme splits its assets into two “closed funds”, a defined contribution and a defined benefit fund, and four sub-funds — ‘Linea Sicurezza’, ‘Linea Progressione’, ‘Linea Espansione’, and ‘Linea Garantita’.

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