Inarcassa to increase private debt allocations
Italian pension fund Inarcassa is set to increase its allocations to private debt funds in the new year.
The €13.5bn (£11.65bn) fund for self-employed engineers and architects in Italy also plans to tactically invest in real estate funds focused on Italy, it said.
The pension fund said that its goal for next year is to remain overweight on certain asset classes, such as private markets and real estate. Any new private debt allocations are expected to be made in early 2024.
Read more: Abu Dhabi’s Mubadala partners with Ares on $1bn private credit fund
The scheme currently invests a total of €2.6bn in private markets, including private equity, private debt, infrastructure, venture capital and direct investment.
The portfolio realignment was agreed during a board meeting in mid-October, and will be rolled out in early 2024.
In a November update, Inarcassa told investors that the value of its assets under management had increased by approximately €300m between September and November, due to the rising value of its equity and bond components.
“During the last board of directors meeting in November, the progressive realignment to the new strategic asset allocation approved in mid-October continued and will be completed in the first months of 2024 in order to mitigate the timing risk,” said an Inarcassa representative in a communication to stakeholders.
Read more: Oaktree raises $3bn for latest special situations fund
“An initial realignment was therefore decided in the Italian government bond sector and a slight reduction in the global equity portfolio.
“It was then decided to increase investment in illiquid vehicles through initiatives in Italian and former Italian private debt funds, as well as a tactical market opportunity in the real estate sector through an investment in real estate funds focused on Italy.”
Next year, the pension fund plans to allocate 40.3 per cent of its total assets to bonds and the Bank of Italy; 21 per cent to equities, including a five per cent allocation to emerging market equities; 16.2 per cent to real assets; and 19 per cent to real estate, while keeping 3.5 per cent in cash.
The scheme targets an annual nominal return of 6.5 per cent, and a maximum loss on a single year of 5.7 per cent.
Read more: Bain veteran to launch European credit fund