Italian pension funds have backed Coima SGR to raise an initial €400m for its first urban regeneration environmental, social and governance (ESG) ESG fund.

The COIMA ESG City Impact Fund received the commitments from cornerstone investors, including lawyers pension fund Cassa Forense, the Inarcassa, the pension fund for architects and Cassa Commercialisti, a pension fund of chartered accountants.

The manager said the fund, the first urban regeneration ESG fund to be launched in Italy, has a total investment capacity of over €1.5bn and is targeting further equity raises up to €1bn, including leverage, to create a total investment capacity of over €4bn.

With a 20-year life span, the evergreen fund will acquire regeneration opportunities across Italy, using a develop-to-core strategy to deliver projects across a range of sectors, including residential and hospitality.

Coima said the fund’s initial pipeline includes a number of potential sites, including former Milanese railway yards such as the Porta Romana area.

The fund is expected to deliver a 10% internal rate of return.

Manfredi Catella, founder and CEO of COIMA said: “The importance of a holistic approach to impact investing has never been greater.

“Our ESG City Impact fund demonstrates a responsible commitment from us with our partners to actively contribute to the recovery of Italy under a new economical, social and environmental paradigm that delivers long-term sustainable returns while supporting sustainable development to guarantee a greener and more inclusive future.”

To read the digital edition of the latest IPE Real Assets magazine click here.