The Vatican Enigma: How the Church Became the World's Ultimate Sovereign Wealth Fund
Before oil built the Gulf states. Before Wall Street carved global empires. Before sovereign wealth had a name there was the Vatican. Shrouded in incense, clad in crimson, yet silently orchestrating one of the greatest financial performances in history.
Special thanks to Undervalued Shares for their inspiring research, which helped bring this hidden history into the light.
The Divine Deal: The Lateran Pacts
The modern Vatican’s wealth was born not in a cathedral, but in a palace. On 11 February 1929, Mussolini formalized the Church’s return to power by signing the Lateran Pacts — a triad of transformative agreements:
The Lateran Treaty: granting full sovereignty to Vatican City.
The Financial Convention: delivering 750 million lire in cash and 1 billion lire in Italian bonds at 5% annual interest.
The Concordat: securing the Church tax privileges and religious authority across Italy.
The Vatican became not just a spiritual superpower — but a financial one. With extraterritorial rights over buildings far beyond St. Peter’s, the Vatican’s footprint totaled 1.73 square kilometers, nearly three times what most people assume.
Nogara: God’s Fund Manager
Enter Bernardino Nogara, the man who would redefine the Vatican’s destiny. Appointed after the Lateran windfall, Nogara accepted the position of Director of the Administration of the Patrimony of the Apostolic See on one condition: no moral constraints on investments.
With the full blessing of Pope Pius XI, Nogara received total autonomy. Protected from palace intrigue, he quietly transformed the Church’s stagnant assets into a stealth empire of global equities, real estate, bonds, and industrial stakes.
His performance? 2,000% growth in ten years, equivalent to a 36% annualized return — despite navigating the Great Depression, rising fascism, and world war.
“After Jesus Christ, the most important thing that happened to the Church is Bernardino Nogara.”
— Cardinal Francis Spellman, Archbishop of New York
No Pope or prelate matched Nogara’s financial imprint. He was not just a manager — he was the architect of the Vatican’s modern wealth.
Distress, Steel, and Strategy: The Nogara Method
Nogara was an active manager but a patient one. He held investments for years or decades, often seizing opportunities others feared.
The Great Depression Play
During the 1929 U.S. stock market crash, he accumulated blue-chip stocks at fire-sale prices:
IBM
General Motors
Bethlehem Steel
RCA
TWA
These companies surged during World War II and the postwar boom. Even more crucially, they allowed the Vatican to diversify into U.S. dollars — a currency that held its value while the Italian lira depreciated by 3,000% during the war.
Nogara’s diary would later reveal that these investments became “a pillar of the Vatican’s post-war financial strength.”
Betting on Collapse
In 1933, Italy’s banking sector teetered on collapse. The government formed a bailout entity, the Istituto per la Ricostruzione Industriale (IRI), with public incentives and a tax-free return.
Nogara sold Vatican-held government bonds from the Lateran settlement and invested heavily in IRI — likely becoming its largest private backer. IRI later controlled Alfa Romeo, Alitalia, and Telefonica, and dominated Italian industry until its dissolution in 1992.
It was a textbook case of distress investing done right.
SGI: Bricks, Mortar, and Holy Profits
Nogara also expanded into real estate via Società Generale Immobiliare (SGI) — founded in 1862, relocated to Rome in 1870, and later helmed by Aldo Samaritani.
The Vatican owned 15% of SGI, whose iconic constructions included:
The Watergate complex (Washington D.C.)
Rome Cavalieri (now a Waldorf Astoria hotel)
SGI’s story even echoed through pop culture — its fictional counterpart, Internazionale Immobiliare, appeared in The Godfather Part III as a Vatican-linked financial powerhouse.
Eventually, SGI sold shares to Gulf and Western, and was transformed into Group SGI, which came under Opus Dei control in the 1990s.
The Hidden Market Mover
By the 1960s, the Vatican’s financial reach was astounding:
Finanz & Wirtschaft estimated it held 7–10% of the entire Italian stock market.
The Economist warned the Vatican could “throw the Italian economy into confusion” if it unloaded its shares.
And Italy was just a fraction of the portfolio. Other holdings spanned America, Switzerland, and Latin America, often shrouded in corporate structures.
Nogara’s financial team, dubbed the “Commando Force,” operated with near-military efficiency. Few institutions have ever managed global capital so discreetly — or with such sovereign freedom.
The Vatican Bank Today: Still Among the Strongest
Fast forward to the present day. The Istituto per le Opere di Religione (IOR), better known as the Vatican Bank, continues to impress.
On June 22, 2024, the Vatican Bank released its financial results for the year 2023 — and they were impressive:
It earned €30.6 million in profit.
It made 23% more money from lending activities compared to the previous year.
Revenue from financial services and trading jumped by 49%.
Income from service fees rose by 31%.
The bank manages a total of €5.4 billion in assets for its clients.
Its Tier 1 capital ratio — a key measure of financial strength — stood at a rock-solid 60%, far above what’s considered healthy in the banking world.
It kept costs well under control, with a cost-to-income ratio of just 48% (meaning it spends only 48 cents to earn every euro).
Audited by Mazars Italia S.p.A. and approved unanimously, the results led to €13.6 million in distributions for religious and charitable works.
For the twelfth consecutive year, the Vatican Bank proved it’s not just surviving — it’s thriving. Still upholding the Vatican’s global mission, while quietly cementing its status as one of the world’s strongest financial institutions.
First Among Sovereigns
The Vatican is not just a sovereign wealth fund. It is the first — and still, in many ways, the greatest.
It owns:
Priceless real estate and art
Blue-chip equities across continents
A bank with no commercial pressures
Sovereignty with no electorate
It has no quarterly earnings calls. No activist investors. No political constraints.
It is the only financial empire in history governed by eternity.
Epilogue: The Quiet Empire
Long before Norway launched a fund, before Singapore’s GIC, before Saudi Arabia’s PIF — the Vatican was already navigating global capital like a silent, sacred sovereign.
Nogara, the man behind the curtain, did not seek fame. But his results echo louder than the bells of St. Peter’s:
Invest long-term.
Buy when others fear.
Hedge across currencies and continents.
And above all — move in silence and humility.
The Vatican isn’t just the oldest sovereign wealth fund.
It’s the one all others still quietly admire.