Proposed Pension Fund Reforms to Enable Alternative Investment Fund Investments
23 January 2026The Bulgarian Venture Capital Association (BVCA), of which NBLO is a long-standing associate member, has submitted a position paper to the Ministry of Finance regarding proposed amendments to the Social Security Code, published for public consultation on 17 December 2025.
The draft legislation is intended to expand the ability of Bulgarian pension funds to invest in Alternative Investment Funds (AIFs). BVCA has been supporting proposals for reforms in this regard consistently since 2019.
While the reform as proposed by the Government goes some way to the purpose, the BVCA has recommended several enhancements.
Key BVCA proposals include: (i) equal treatment of ‘licensed’ and ‘registered’ AIFs, noting that both categories present equivalent risk profiles under EU Directive 2011/61/EU and indeed are not distinguished by by major institutional investors in Bulgaria such as EIF and EBRD; (ii) increasing the single-AIF investment limit from 7% to 15% to align with the treatment of other collective investment undertakings; and (iii) expressly permitting AIFs and pension funds to enter into capital commitments.
While this is an industry standard for investors to commit to subscribe for fund units upon capital calls, the position of the Bulgarian Financial Supervision Commission in 2019 that in its view Bulgarian law does not permit the practice.
The BVCA has emphasized that these missing provisions would risk the still-birth of the reform: Bulgarian pension funds have been legally permitted for over seven years to invest in AIFs but have failed to do so, for these reasons among others.