Arca to buy Vegagest funds by September, CEO confirms

Milan-based Arca Asset Management Sgr is expecting to finalise the acquisiton of the mutual funds business of Vega Asset Management by the end of September, according to chief executive Ugo Loser.

On April 26, Arca signed an agreement with Vegagest Sgr for the acquisition of 18 mutual investment funds, subject to the approval of the Italian regulator. Vega Asset Management Sgr is the name for a mutual funds business formerly known as NorVega, a joint venture between Vegagest Sgr and Nordea Investment Funds, a Luxembourg subsidiary of Nordea, the Swedish financial services group.

Vegagest Sgr is the controlling company of Vega Asset Management Sgr (not to be confused with hedge funds Vega Asset Management and Vega Capital) and the real estate manager Vegagest Immobiliare Sgr Spa.

“The deal for the acquisition of Vega Asset Management’s mutual funds business will bring around €700m of new assets under management. We expect to merge the products offering by September, which will allow us to achieve significant economies of scale and a more efficient cost structure,” Loser told Investment Europe.

“We are working to develop a product offering to target the retail market, with specific expertise on fixed income,” he added.

Under the terms of the deal, Arca has also signed a distribution agreement with Vegagest’s partners Gruppo Cassa di Risparmio di Ferrara, Cassa di Risparmio di Cento, Cassa di Risparmio di San Miniato and Gruppo Banca Popolare di Bari.

Loser joined Arca in May 2011 and under his leadership the fund manager has seen significant strategic and organisational changes. After being subject to a number of takeover attempts, Arca turned its strategy to the offensive, signing a deal to buy the mutual funds business of Vegagest.

Last September, Arca also negotiated the acquisition of the mutual funds business of Optima Sgr, part of the Banca Popolare dell’Emilia Romagna, based in Reggio Emilia.

“We have invested to relaunch Arca and its business model. Since I joined, the operating costs have been cut to just above 50% of revenue from 90%. We have also made our personnel structure more efficient, reducing the number of employees from 180 to 70 through a soft restructuring. Most operational functions have now been outsourced,” Loser said.

Arca currently manages €16bn for both institutional and retail clients.

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