Romanian private pension funds allowed to invest in infrastructure projects and private equity

The seven companies that manage mandatory private pension funds (Pillar II) in Romania will be allowed to invest up to 15% of the assets they manage (some EUR 2 billion of the EUR 13 bln total assets at this moment) in infrastructure projects such as highways, starting February 2020, according to the new regulations issued by the financial markets regulator ASF that come into force next month.

They will also be allowed to invest up to 10% of their assets in private companies (as opposed to public, or listed, companies).

The new regulations were published in the Official Gazette last year. The fund managers welcomed the amendments, since the assets under their management are rising to the point where the local stock exchange provides insufficient investment alternatives.

“This is a welcome step as the local stock market becomes smaller as compared to the assets that have been accumulating in the private pension funds,” said Radu Crăciun, general manager of BCR Pensii and president of the Association of Private Pension Fund Managers (APAPR), local Mediafax reported.

The new classes of assets help fund managers achieve better risk management, he explained, adding that the outcome will not become visible on the short term but rather in the long term, in line with the maturity of the new investment classes.

Currently, Pillar II funds have 61% of their assets placed in government securities and 22% in listed shares both on the Bucharest Stock Exchange and on foreign markets, according to ASF data.

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