The Romanian government's economic recovery package and the initiatives of the Ministry of Finance, the Financial Supervisory Authority (ASF), and the Investment and Development Bank (IDB) envisage a two-step mechanism for allowing the privately managed pension funds to invest in private equity (PE) and venture capital funds, according to Cursdeguvernare.ro.  

The measure is advocated by the Romanian Private Investment Association, but the sole supervision provided by the state may prompt significant perceived risks until the contributors’ associations are given at least a consultative role in the pension funds’ management structure. At this moment, Pillar II pension funds are allowed to invest up to 1% of their portfolios in PE funds – but have actually invested only 0.2%.

According to the proposal, IDB will be authorised in a first step to participate in and/or establish investment vehicles and investment funds. In a second step, the privately managed mandatory pension funds (Pillar II) will be allowed to invest in private equity funds up to 5% of their portfolio, provided the state or the Bank for Investment and Development holds stakes as in the respective funds.

These measures will represent infusions of risk capital into the private sector and will allow entrepreneurial companies to scale. ROPEA, the Romanian Private Investment Association, noted in a statement that the two measures will develop private equity instruments.

ROPEA indicated that the establishment of a fund-of-funds vehicle, which would mobilise Romanian public and institutional capital (including from banks, pension funds, and insurance companies), would be opportune and would support the development of the alternative venture capital and financing market in our country, while at the same time supporting the entrepreneurial environment.

The privately managed Pillar II pension funds had assets of RON 200 billion (EUR 40 billion) at the end of 2025, and with an average exposure of 5% of private pension funds, the amount allocated to possible investments - conditional on the involvement of the IDB - would reach over RON 10 billion (EUR 2 billion).

Cursdeguvernare.ro said that Radu Crăciun, general manager and president of BCR Pensii and the Association for Privately Administered Pensions in Romania (APAPR), stated last autumn that pension funds need new investment vehicles that direct the accumulated capital into productive investments.

Pension funds are key investors in private equity internationally, with an average allocation of 6% of assets under management across OECD countries, Cursdeguvernare.ro argued. In Romania, current exposures and legal limits are much lower, especially for Pillar II, at around 0.2%, against a current maximum limit of 1%.

iulian@romania-insider.com

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