Growth in pension fund assets in Italy remains relatively sedate, despite being substantially upgraded following the implementation of tax enhanced benefits for contributions, says Cerulli Associates in a new report, Trends in the Italian Asset Management Marketplace.
Cerulli believes that supplementary pension schemes will hold some e27bn by 2005, the majority of which will be in industry schemes, which are earmarked for the fastest growth rate, given that 40 new closed-end industry schemes should be operational within the next five years.
Only 18% of Italy’s workforce now contribute to a supplementary scheme. New tax breaks introduced at the beginning of the year are expected to stimulate interest in the supplementary plans, but only e2.1bn had gone into the reformed system by March, which Cerulli considers “dismal”, given the country’s total financial assets.
Elsewhere the report finds that the Italian mutual fund industry will surpass the e1trn mark by 2005, fuelled by growth in foreign funds operating in Italy.
Currently, the Italian mutual fund market is worth e560bn, claims Cerulli, but the growth will come from overseas domiciled vehicles that are cross-registered for sale in Italy, as the growth rate among local Italian domiciled funds slows down. Cerulli expects to see an annual compound growth rate of 16% for foreign funds, rising to 20% if Luxembourg funds are excluded. Local funds will grow by some 11.5%.
In addition, at e185bn, the gestioni patrimoniali in fondi (GPF) market is actually larger than the US mutual fund wrap-fee market, says Cerulli, adding that assets held in GPF structures will double to represent 38% of the entire mutual fund industry in Italy by 2005.

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