The Italian government is proposing new rules in its 2026 budget law to channel local pension fund capital into domestic infrastructure to stimulate growth.
The law sets a maximum limit for investments in sectors like water, energy, transport, healthcare and non-residential public real estate, as well as cultural and environmental projects.
The minister of economy and finance, in agreement with the minister of labour and social policies and pension regulator Covip, will set the threshold for investments in infrastructure projects through a decree.
According to the 2026 budget law, pension funds could invest in infrastructure indirectly through collective investment schemes or through securities issued as part of securitisation transactions by companies and entities.
The proposed 2026 budget law, which reforms a legislative decree issued in 2005, is currently being discussed in parliament. The 2005 decree originally set rules and limits for investments in real estate companies and closed-end real estate investment funds by Italy’s industry-wide Fondi Negoziali and private pension funds PIP.
Italy is nudging second pillar pension funds Fondi Pensione Negoziali, managing €75bn assets, to increase investments in domestic infrastructure and private markets, in line with a trend seen across Europe.
Arco, the pension fund for workers in the wood, furniture, forestry, brick and concrete sectors, recently increased its commitment to an infrastructure fund-of-funds (FoFF) managed by CDP Real Assets.
The FoF infrastructure is one of the three investment vehicles to invest in private markets of the Real Economy Project launched by pension funds association Assofondipensione in partnership with state-owned investment bank Cassa Depositi e Prestiti for private markets investments in Italy.
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