ITALY - The local government of the Veneto region in the North-East of Italy is considering using the resources of its local pension funds to finance regional infrastructure projects.
Andrea Sabbadini of the financial resources department of the local government told delegates at an industry conference in Brussels yesterday pension fund participation in infrastructure projects is one of the options being considered by the region.
Sabbadini told IPE the best infrastructure projects for pension funds were likely to be motorways, as they are considered to be a low-risk investment, and four are currently under construction.
Local pension fund investments could amount to around €2bn, though Sabbadini added overseas pension funds might be allowed to tender.
The news comes as pension experts and politicians throughout Europe are looking at investments by pension funds in local infrastructure projects.
However, Laura Crescentini of Assoprevidenza, the Italian association for supplementary pension provisions, said during a roundtable discussion on private sector territorial pension schemes she had her reservations about local investments by territorial schemes, warning local investments in small regions are not advisable.
"In theory it is possible, but in practice there are some risks related to the question of concentration," she said, adding such investments are also difficult to achieve.
Franco Deotti, director of €84m Solidarietà Veneto fund for the industrial workers operating in the Veneto region, also said his pension fund has been researching ways to reinvest in the territory but had come across substantial risks.
He explained investments in regional infrastructure or investments through private equity funds were some of the options being considered.
"We are still looking at the options in depth," said Deotti, though he added no decision had been made yet.
Bruno Gabbelieri, secretary general of the European Association of Paritarian Institutions of Social Protection (AEIP) in Brussels, yesterday proposed a new inter-territorial fund for pension fund investments, whereby regions can work together under a new partnership, as a possible solution to filter out negative impacts from local investments.
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