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The Pope wants an asset manager for the Vatican’s finances

by Carlo Marroni

The reform process of Vatican finances, launched in 2010, carried on with difficulty and then accelerated by Pope Francis a little over a year ago with the establishment of the Secretariat for the Economy, the Council and the Auditor (yet to be named), is still a work in progress.

The statutes of the new bodies have been enacted, but still unresolved is the issue of Vatican Asset Management (VAM), the body for the unified management of real estate and portfolios able to ensure the autonomy of the Vatican’s various ministries overseen by the Curia, which have their own assets.

Now, a plan taking shape would incorporate some of the aspects of the initial proposal drawn up by the Council for the Economy and by Cardinal George Pell, the prefect of the Secretariat for the Economy.

This plan, which may have already been presented to Pope Francis, aims to create a unified asset manager for the Holy See and of the Governorate of Vatican City State, first of all the real estate, and in the future also securities, or financial portfolios. Property and portfolios would still belong to the dicastery or organization that today have legal title to them.

The idea of VAM was announced in July 2014, but then did not see the light. Actually, compared to what was decided last summer, several things have changed, as the transfer of the ordinary section of APSA, the heart of the real estate assets of the Holy See, to the new ministry headed by Cardinal Pell, which has been achieved only in part (human resources and procurement).

The property assets of the Holy See, of which there is no official valuation, by a conservative estimate could be around €9-10 billion including the assets of all the dicasteries and entities linked to the Holy See, and of course, without considering the functional properties, which do not have a market estimate.

For example, the Palace of Propaganda in Piazza di Spagna, or the complex of San Calisto in Trastevere, just to name a few, are excluded from any calculation.

The valuation covers “free” apartments and buildings: APSA should own about 2,000 apartments, while the assets of Propaganda Fide are thought to be more sizable. The Governorate owns properties only within the Leonine walls: in this case the work of VAM would aim at facility management. In the future, the management of financial portfolios may be more complex. In any case, the centralization of the management would be done according to the indications given by the ministries depending on their mission, and the latter would always keep the ownership.

What is the value of the Pope's overall portfolio? The Institute for Religious Works (IOR) – whose “dual” governance structure with a council of cardinals and a secular board could be replicated in VAM - has a net asset of less than €1 billion, while for the other ministries there are only estimates of around €5-6 billion including liquid shares and securities. Finally, in the background, there is even the prospect of involving the assets of religious congregations, whose extent is as unknown as great.