ITALY - Fondenergia, the pension fund for the Italian energy sector employees, has awarded a €760m (US$1.1bn) risk-overlay mandate to Feri Institutional Advisors, marking the largest institutional mandate for the advisor in Italy.
The pension fund - which manages the pension money of companies such as ENI Group, BP, Shell, Tamoil and Total - will hedge its equity and currency risks for its portfolio.
Feri Institutional Advisors director of business development Stefano Kihlgren told Global Pensions: "As far as the equity risk is concerned, we will use futures on equity indices, while we will hedge the currency risk through currency forwards."
Kihlgren added these kinds of mandates are completely adaptable to existing portfolios, without any need for a restructuring. This makes them particularly suitable to a conservative pension industry such as the Italian one.
He also said Fondenergia will pay a commission based on the size of the overall portfolio, not only on the equity part.
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