The Italian fund management industry is in the grip of continued turmoil, but a change in the tax law has brightened prospects.
One of the options under discussion is the break-up of Pioneer into its constituent parts. Pioneer’s Italian concerns could interest an Italian bidder, while the US part of the business (worth about 20% of the group) could be sold separately to US or other bidders. Corrado Passera, chief executive of Intesa Sanpaolo, has denied having any interest in adding Pioneer’s Italian interests to his asset manager subsidiary Eurizon.
However, this option has gained influential backing from the Italian government anxious to build up an Italian fund management champion. Pioneer was valued last year by investment bank Banca Leonardo at €3.5bn to €4bn. At end of 2009, the asset manager had €2.5bn in assets under management. Banca Leonardo, itself under pressure to reduce its capital adequacy requirements, has sold its fund management arm to AcomeA, a fund manager positioning itself as an independent fund manager.
The deal will bring AcomeA’s assets under management to €600m. Launched in July 2010, AcomeA was formerly SAI Asset Management, part of the insurance group Fondiaria-Sai.
While shoppers in Milan were making last-minute purchases for Christmas, Intesa Sanpaolo’s asset management unit Banca Fideuram decided to buy Banca Sara, on offer at a token price of €1. It is a decision that will expand its network of financial advisers by 10%, strengthening its already predominant position as one of Italy’s leading distribution networks.
Banca Sara has 460 financial advisers and €2.bn ($3.6bn) worth of assets under management. Fideuram has more than 4,000 private bankers and €70bn under management.
Fideuram, among Italy’s leading fund managers, will finalise the deal in the coming months and will obtain cost and revenue synergies, it said in a joint statement with the seller Sara Assicurazioni. Sara stated that this decision would allow it to focus on its core business, which is insurance, while also boosting its capital adequacy position ahead of the implementation of Solvency II requirements.
The majority of Italian asset managers are ‘ captives’, owned by banking or insurance groups. The perception among investors is that this has not helped the fund managers’ performance, and is often cited as the reason for the funds outflows the industry has witnessed. Further confirmation of this is the relative outperformance of the independents, foremost among whom is Azimut, Italy’s largest independent asset manager. Azimut is looking to double its assets under management in four years, according to chief executive Pietro Giuliani. He said that Azimut would double its 2009 total AUM, reaching a total of €27bn. At the end of 2010, Azimut had assets of €14.6bn, after a decade of continuous growth, except for 2008.
Giuliani indicated that Azimut had an available war chest of €100m to pursue a growth strategy, a significant improvement on the €21.9m at the end of 2009. He said this could be used in a number of ways, includingshare buybacks or dividends.
He also indicated the possibility of going down the acquisitions route, saying that he would consider buying specialist boutiques in Italy or Europe. As he explained: “Our ideal target would be boutique managers, but ones with a distribution network in place.”
Azimut would be looking to distribute funds (equities, bonds and commodities) into Asia and Australia, launching operations from Shanghai and Hong Kong. Giuliani expects these high growth markets would constitute about 10% of the firm’s assets under management.