Italian pension fund to 'abandon' real estate

The ENPAM pension fund for medical professionals is to gradually lower its investments into the real estate sector as part of its recently approved reform of its future asset allocation.

The €12.5 billion group, which is Italy's biggest private pension fund, told Citywire Global that while this change does not mean they are disposing of their current real estate investments, they will no longer be committing more incoming assets to this sector.

'There will be a substantial abandonment of the housing market by the foundation in the next year,' a spokesperson told Citywire Global.

Part of the pension fund's new asset allocation plans, which were recently approved by the Italian Ministry of Labour, will see it boost its investments in index funds as it looks to increase its passive investments. It will also be reducing its structured products portfolio.

The majority of ENPAM's property exposure is through real estate funds and their use is also being reviewed as part of its reform plans which should soon establish its definitive asset allocation based on an ALM (Asset Liability Management) logic.