ITALY - Italian pension schemes are asking fund managers to switch to low volatility cash-like instruments that can be liquidated quickly, MandateWire reports.
However, in its 2009 budget report the scheme said that, should the economy pick up, it will also evaluate a different approach.
The €11m available for investment this year will flow into cash and deposits "to guarantee the preservation of the invested capital and at the same time its immediate availability".
The fund expects its investments to reach €273m by the end of the year.
More than a year ago, the fund opted for cash in view of the worsening economic outlook and put €5m into Mediobanca in early October, followed by €24m for AbaxBank in mid-December 2007.
This comes as the €232m Cooperlavoro, the occupational pension fund for the employees of Italy's production cooperatives, told MandateWire it had made its asset managers reinvest all new inflows in liquidities - a measure that will continue until the end of this month, as the Italian regulator is currently allowing pension funds to hold more than 20% in cash, a change the fund has hoped for.
Director Flavio Casetti said that in October the pension fund board asked asset managers "to reduce the exposure to risk, deciding that all new inflows be invested in liquidity or equivalent titles", but did not disclose what would happen with inflows after the end of this month. Concurrently, the scheme has suspended its managers' performance fees.
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