On the look out for the best fund managers

Fund manager selection in the Italian market is developing systems that screen
for stability and seniority, as well as top performance.

Multi-management in Italy is claiming an ever larger slice of the asset management market, as it enables fund managers of all shapes and sizes to offer their clients access to the best fund managers in the world.

Fund platforms vary in size, mostly up to about 30 funds, while the strategies employed reflect the size and the nature of business of the parent group. All providers aim to offer a range of the top managers in their fields. The difference comes with the management of the platform, usually a Luxembourg-domiciled umbrella fund.

Banca Generali and Intesa Sanpaolo have both adopted open architecture, choosing fund managers by reputation and performance over the long term, but otherwise leaving them to manage their funds.

Open architecture in Italy is a conscious move away from the standard model of captive fund managers pushing the products of their parent groups, usually banks or insurance groups with large distribution networks.

Banca Generali and Intesa Sanpaolo have more than 20 funds on their respective platforms. Other distributors narrow the choice much further: Deutsche Bank operates a ‘narrow architecture’ system with eight funds, whose managers are described as ‘partners’.

Mediolanum, the third largest distribution network in Italy, is the narrowest of them all, operating with just six fund houses.

The growing success of multi-managers and the financial adviser networks, like the groups with open or narrow architecture, reflects the growing appetite among investors for high performing international providers. Multi-managers tend to be more closely involved in the selection of their managers, usually reflecting a determination to meet client demand for high quality funds.

Key Areas

Multi-management is one of the key areas of business for AllianzGI Investment Europe, along with European securities and global asset allocation. Launched last May, AllianzGI IE is working through a plan to integrate its Italian and French fund platform operations.

Last September, AllianzGI IE expanded its portfolio management activities into Switzerland, taking over responsibility for the fixed income investment management for Allianz Suisse and adding a team of fixed income managers in Zurich.

Headed by chief executive Giovanni Bagiotti, the division manages more than €125bn of institutional and retail assets. The funds platform has 30 funds, and is managed in Paris by Eric Machenaud and his eight-strong staff (with one in Milan). The asset class mix of AllianzGI IE is balanced, with about 64% of the assets managed in fixed income, 23% in balanced portfolios, 7% in equities and 6% in the money market.

AllianzGI IE has also developed an expertise in alternative managers, which they have turned to analyse the new breed of Newcits, says Claudio Barberis (pictured), who is part of the multi-management team in Milan. They have a fund of hedge fund approach, based around ten traditional investment styles.