​Italian Pension Fund Solidarietà Veneto To Add Infrastructure, Real Estate

The pension fund reported that environmental considerations were increasingly mentioned in meetings by some members. 

Solidarietà Veneto said that in the January-to-June period, financial markets had remained hostage to the policies and announcements of the central banks, which meant that attempting to diversify via quoted investments alone was likely to prove partially ineffective.

This, it said, was the reason the pension fund had planned, in its last strategic asset allocation review, gradually to increase its allocation to alternatives.

Since 2013 the fund had been leading the way in Italy in this area, it said, citing the start of its investing in private debt and private equity. 

Fresh sub-fund tweaks 

The pension fund also said it made changes to some of its sub-funds at the beginning of July, including to the asset allocation mix of the ‘Dynamic’ fund. The equity weighting for this sub-fund has been ramped up to 54% from 50%, with the bond weighting falling to 46% from 50%.

“The intention is to compensate for the greater volatility arising from the increase in equities through deeper diversification and a more effective risk/return ratio, which will benefit the young people associated with this sub-fund,” the pension fund said.

Meanwhile, benchmarks for the ‘Prudent’ and ‘Income’ sub-funds are changing to lengthen the bond duration, which the pension fund said should result in higher expected returns over the next few years.

Solidarietà Veneto’s total assets rose to €1.36bn at the end of June from €1.26bn at the close of 2018.

“The new wave of expansive monetary policies announced by the ECB and the FED has driven the performance of almost all the asset classes in the first part of 2019,” the pension fund said.

The Dynamic sub-fund made a 6.09% return in the six-month period, it reported, while the Income, Prudent and Guaranteed TFR sub-funds posted returns of 3.93%, 3.59%, and 1.03% respectively.