Fontedir, the pension fund for the executives of Telecom Italia, the country’s largest telecommunication firm, has excluded the possibility of investing in illiquid asset classes.

The scheme won’t invest in private markets given the high average age of its members and the limited size of its assets, it said on a note about its investment policy.

Fontedir had assessed the possibility of including investments in closed-end funds or illiquid asset classes in its investment portfolio to benefit from the risk and complexity premia generated by those types of investments, it said.

The pension fund had analysed the characteristics of its members based on data extracted last October, concluding that the average age of its members was 57.7 years old, higher than the average age in pre-existing funds of around 51 years old at the end of 2022.

The number of members totalled 1,132  (net of positions leaving in 2023), including 513 active and 619 (54.7%) non-active members who have left the company but have maintained their investment in the fund.

Considering only active members, the average age goes down to 52.5 years old, it added.

The scheme members can invest in the three sub-funds – ‘assicurativo’, investing in insurance policies with full guarantee on the contributions paid and run by UnipolSai; ‘obbligazionario misto’, which invest 75% of assets in bonds with a 5/6 years duration, and 25% in equities, run by Amundi; and ‘bilanciato’, investing 60% of assets in equities and 40% in bonds, also managed by Amundi, according to the note.

Assets under management total €272.02m, including € 216.88m in the assicurativo sub-fund, €18.131m in the obbligazionario misto, and €37.010m in the bilanciato sub-funds, it added.

Members opt to allocate pension assets mostly in the assicurativo sub-fund as a sole investment (61%), and 17% opt for a combination of sub-fund investments including the assicurativo.

Only 10% of members invest only the obbligazionario misto or bilanciato sub-funds, it said.

The weight of equity risk on the pension fund’s assets is 13.5%, lower than the average of pre-existing funds (21%), it added.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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