Generali has launched a new asset management company Aperture Investors with a disruptive revenue model led by Peter Kraus, the former chairman and CEO of AllianceBernstein (AB) and global co-head of Goldman Sachs’ Investment Management Division.
Generali will contribute up to $4bn of strategic investment capital for individual investment strategies, subject to the approval of Assicurazioni Generali’s Board of Directors and Aperture Investors.
In Aperture Investors’ unique revenue model, the firm charges ETF-like fees, which can only go higher when managers beat their benchmarks. Similarly, managers are paid modest base compensation and can only earn more when they generate outperformance, a major departure from the traditional fixed-fee structure in which managers are compensated based on the volume of assets managed.
In addition, a deferral mechanism provides for unearned compensation to be returned to Aperture Investors’ clients ensuring that the profitability of the firm is dependent on whether or not its clients receive returns in excess of benchmarks over the long run.
Tim Ryan, CEO of Generali Asset Management, commented: “Aperture Investors offers us the ability to develop a new model that addresses manager incentives while also leveraging invaluable know-how in our sector.”