SCALING UP AI
While many asset management firms have chosen the acquisition route to scale up their AI capabilities in recent times, others like Mediolanum have opted for leveraging their own resources while developing proprietary tools.
Pietribiasi considers that the real acceleration in the digital space has been possible thanks to off-the-shelf AI solutions, which according to him can be easily deployed across the business by offering different teams some AI assistants, who will help analyse the data behind their dashboards containing the info that staff normally look for.
By expanding our internal competencies, we can also achieve better economies of scale and reducing the cost for our clients by switching investments in target funds into portfolios of securities managed internally.”
He continues: "So, in order to maximize our AI benefits, we need to start checking how our people use data, which usually comes from many different sources.
"We have to organise data so that machines can provide useful data insights. The new technologies allow us to bypass some human interaction challenges. In fact, when we are developing complex AI by combining people's traditional skills with coders, we need "translators" in order to achieve results.
"This is expensive and time consuming. Thus, since we can access off-the-shelf tech, even if the AI agents are more basic, no translator is required and the up-skilling of people with traditional competencies is much faster."
Through the entire group, Mediolanum has access to around one and a half million clients across Europe. Although the majority are retail investors, some 36% of MIFL's total AUM belongs to institutional clients.
As per asset classes, MIFL business split is 53% in equities, 38% in bonds, and most of the remaining in cash with a small percentage allocated to alternative strategies.
The firm's European AM platform and distribution is based in Dublin, but it is also present in Italy and Spain through two other management companies, fully owed by Banca Mediolanum and run independently to MIFL.
The company manages some segregated mandates and 61 funds (Ucits and AIF products domiciled in Ireland and Luxembourg), which are distributed through Banca Mediolanum in Italy, Banco Mediolanum in Spain, and Bank Haus August Lenz and a selected number of specialised IFAs, in Germany.
Mediolanum's CEO says the firm's top priority for 2020 is to continue delivering performance, as well as to keep improving the relationships with distributors, and through them, with their investors, to constantly renew their trust.
"Trust cannot be taken for granted in such a competitive market, but it can be built with transparency and tailor-made communication depending on the audience and type of investor," Pietribiasi says.
To achieve this objective, technology will play a key role. "Our Interactive Institutional Factsheet is the first example of that journey. In fact, our distributors and institutional investors have access to smart analytics that allow them to access data and information to do their own jobs more efficiently and through our APIs our distributors will be able to access the data they need for their own tools to communicate and update their clients with bespoke solutions. "
While the firm is always open to considering new distribution opportunities, it is not eyeing any market launches in the short term since its priority now is to continue focusing on existing distributors to maximise its retention by improving the quality of its service.
When asked about the strategies the company favour most in terms of risk/return for 2020, Pietribiasi said: "As we did in 2019, our focus for next year will be to continue to target maturity investment solutions to address clients' needs in the medium term, and will continue to promote equity strategies to meet long term objectives, because with the right investing approach, investors could benefit from a better entry point with increasing market volatility.
"That said, we also believe that enforcing ESG principles and having the appropriate engagement with target invested companies to promote sustainability could deliver better results, even if this is going to materialise more significantly in the long term."