Petercam sees potential in Italy during 2013
Alessandro Fonzi, country head for Brussels-based Petercam has discussed the company’s strategy of opening a Milan office to target pension funds.
Despite the debt crisis in peripheral Europe and the toll that the implementation of austerity measures is likely to have on households’ ability to save, Italy remains an attractive destination for European asset management boutiques.
Brussels-based fund manager Petercam recently announced the strategic decision to open an office in Milan to target Italian pension funds for segregated mandates and Italian clients for the distribution of its funds, which will be available on the market in 2013.
To lead the firm’s efforts in the country, Petercam has chosen Alessandro Fonzi (pictured) as Italy country head. Fonzi, previously head of institutional clients and financial intermediaries Italy at Lombard Odier, developed a specific expertise in the start-up of asset management firms, after working with Fidelity and Lombard Odier on the launch of their Italian operations. “Italy’s reputation is damaged by external factors rather than a real crisis of the market. There are still good business opportunities for asset managers who are able to identify the correct model to enter the market,” he says.
A local focus
This means identifying local partners for funds distribution and to allocate a sufficient budget to establish a local office with at least two experienced sales people.
“It’s relatively easy to export asset management expertise to a new market. But from previous experiences I have learned that a foreign player should understand and adapt its operating processes, and not only its products to the local market,” he says.
“This means setting up personal relationships with the local distribution network. A good sales team alone is not sufficient.”
A foreign player should also be aware of the peculiar role of financial advisers in the country, “tied agents rather than independent advisers”, of the different legal framework and of domestic issues such as the industry association which oversees the activity of investment advisers.
The macro environment in the country has changed since Fonzi set up the Italian office of Fidelity.
“Today it is impossible to approve a five-year business plan. Each firm has to comply with tight budgets, and only when the return on the first investments is cashed in, is it possible to plan further initiatives, in particular in the institutional space,” he says.
His previous start-up experiences have taught Fonzi valuable lessons. “Asset management is an industrial business as many others. It’s very important to streamline it to leverage on the framework developed in the home market,” he says.
Petercam will introduce the expertise developed on equity dividend strategies, listed real estate, high yield and sustainable investment solutions, among other strategies.
Petercam will register both the Belgian-based Petercam B Sicav and the Luxembourg-based Petercam L Sicav. Fonzi says: “Most equity funds, like European equity strategies, the equity dividend strategies and our well-regarded global thematic funds, are domiciled in Belgium, while most fixed income funds, like the highly rated total return global bond, our unique sustainable government bond and our high-yield strategies, are domiciled in Luxembourg: we aim to register all our Ucits funds and all share classes, whether for institutional or private investors.”
Petercam is also looking for investment strategies with a good risk/return balance, and to present its sustainable bond fund, Petercam L Bonds Government Sustainable, which applies a second sustainable layer of Alpha to its active management process.
“Our proprietary fundamental SRI model, which is based on 55 indicators, defines the investment universe for the portfolio management team, so that it can only invest in countries that are among the best in terms of sound social, environmental, democratic and economic policies,” Fonzi adds.
All funds will be available both on funds platforms and for direct distribution through the network of private bankers. “We will not provide direct advisory to clients, but we will make our funds available to the advisers in charge of guiding clients towards the best investment mix in the current market environment,” Fonzi says.
This, according to the manager, reflects cyclical patterns: “Investors should have a clear destination for their strategy, which doesn’t change according to market conditions. What changes is the route taken to reach it.”