Eurizon's Mazzini: "We are tailoring different strategies to specific regional needs"

Eurizon’s Massimo Mazzini outlines the firm’s global expansion with a recent launch in Spain highlighting the importance of having local presence.

Eurizon, with 15 years’ life, is the asset management division of the Italian Group Intesa Sanpaolo. It achieved €311bn in assets under management as of the end of June 2018, a 4% up compared to the same date a year earlier. The figure goes up to €391bn when including the AUM resulting from the alliance with China’s asset manager Penghua.

With a business split 46% retail, 52% institutional and 2% wholesale, Eurizon’s results over the last three years “confirmed the company’s capability to compete across Europe. According to Eurizon’s head of Marketing and Business Development Massimo Mazzini, the firm was ranked second in Europe in terms of total inflows to mutual funds in  2015, and gained a first position one year later.

Eurizon offers a broad range of tailored products to meet specific client needs wrapped in funds, managed accounts and dedicated segregated account for institutional client. It has a diversified investment approach with abilities on Euro Fixed Income, Multi-Asset and Quantitative Management.

According to Mazzini (pictured), Eurizon’s head of Marketing and Business Development, the firm has grown largely thanks to the development of its main client: Intesa Sanpaolo’s Banca dei Territori division. “By listening to our clients through the network, and using our competence on the markets while constantly keeping up to date with regulatory changes, we have been able to develop a range of products that evolve in step with the needs of our clients.”

Mazzini highlights the ongoing post-sales support offered by the firm, as one of its main identity marks. “By leveraging this competitive advantage, we have been developing alongside our captive business, our market of third party clients, formed by both wholesale distributors and institutional clients, in which we have always held leadership on the Italian market.

With regards to Eurizon’s global business, Mazzini points at a fundamental strategic principle: being present with dedicated teams in key markets such as China, the UK, Luxembourg, Germany, France, Switzerland, Hong Kong and East Europe, and now Spain is key for expanding and succeeding abroad.

“The company’s extraordinary expansion on both the domestic and international markets has been led and inspired by the leadership of Tommaso Corcos, who in addition to supporting the organisation in gaining ever more awareness of its strengths, has chosen to invest in top-notch teams, playing a crucial role in establishing Eurizon SLJ in London, as well as the alternative debt business, while at the same time boosting the European and Asian markets,” underlines Mazzini.

The firm recently expanded in Continental Europe, opening new branches in Germany, France and Switzerland, considered key markets for Eurizon.

“We are tailoring different strategies to specific regional needs. For instance, Germany’s main challenge is that the market is dominated by a few large players, so differentiation from competitors is crucial. Conversely, in France we are more focused on local boutique clients and a bit more on the institutional segment.

“In other areas we adopted different approaches, with partnership agreements including that with Chinese asset manager Penghua, or that in London – where we set up Eurizon SLJ Capital LTD, an asset manager providing investment and advisory services with a particular focus on currency management and macroeconomic research.”

INVESTMENT PROCESS

Eurizon’s investment process is divided into three stages:

1. Strategic management process: The board of directors, – on the basis of the Investment Committee’s analysis – provides the General Investment Strategies having the purpose of guiding the management activities.
2. Management process: Carried out by the Chief Executive Officer, the Chief Investment Officer and the Portfolio Management Team in line with the guidelines defined in the Strategic Management Process.
3. Control process: Compliance, Risk Management and the rest of levels of the investment area verify the consistency of portfolios with respect to the decisions taken under the investment process.

Starting in 2017, Eurizon integrated ESG and SRI principles into its investment process, adopting specific methodologies to select and monitor those financial instruments to include in the firm’s investment choices.

BUSINESS PLANS

Apart from further developing its business in the countries already present (gaining more clients and assets), Eurizon aims at expanding across other European regions and LatAm.

With regards to “known” markets, Mazzini says: “We are tailoring different strategies to specific regional needs. In terms of products, considering that Italian retail investors are usually conservative, we are developing multi asset solutions focusing on managing the drawdown risk.

“Beyond Italy, we are focusing on wholesale and institutional investors, trying to enhance the level of penetration through niche solutions such as the Eurizon Fund Bond High Yield and the Epsilon Fund Emerging Bond Total Return.”

Looking ahead, Eurizon focuses on sustainable finances. In 1996, it became the first Italian asset manager to offer ethical funds, which lay out clear and articulated criteria for the selection of securities, a Sustainability Committee, and the devolvement of earnings. “We thought we could be more engaged on this area so we decided to integrate the ESG criteria within our investment policy.

“We would like to be a player with responsibility on corporate governance issues, sustainability, etc,” underlines Mazzini.

In this line, Eurizon recently launched the Eurizon Fund Absolute Green Bond and the Eurizon Fund Sustainable Global Equity.

SPANISH LAUNCH

Eurizon has recently opened a branch in Madrid, led by Bruno Patain, who has been named country head for Spain and Portugal.

The Spanish business, as in France, Germany and Switzerland, will be coordinated by Gabriele Miodini, head of Sales & Client Management at Eurizon Capital.

Miodini said: “With the opening of the branch in Madrid, we are setting a new milestone in our ambitious project to strengthen the brand in Continental Europe.

“We are pleased to have Bruno Patain on board, and we are confident that his twenty years of experience in wealth management will further enrich our team of experts involved in expanding our international business in the area.”

MARKETS VIEWS

Eurizon is keeping a moderately bullish exposure to risk assets – to stocks in particular – given the ongoing expansionary global economic cycle. “We consider the current stock market’s downswing a correction, and will read any accommodative signal sent by the Fed or by Trump as an opportunity to increase our exposure to equity.

“We now prefer US and Japanese stocks than European. Our approach to the bonds market is neutral. At current yields, US government bonds are starting to hold appeal, and we favour them over German Bunds.”

The firm’s positioning to currencies is bullish other than the euro. The yen and the pound should help buffer any further volatility triggered by political risks in the Eurozone, concludes Mazzini.