Eurizon’s Auleta applies the holistic view
Discovering consistency, a good approach to risk, and recognition of communications needs.
Eurizon Capital Sgr is the asset management arm of Intesa Sanpaolo, one of the two largest banking groups in Italy. It is the biggest asset manager in the country, its closest rivals being Banca Generali Sgr, part of the insurance giant of that name, and Pioneer Investments, the asset management subsidiary of UniCredit group – Intesa Sanpaolo’s main rival.
To service the needs of one of the largest banking networks in Europe, Eurizon Capital has to have a large and comprehensive buy list of third-party products. The buy list comprises 180 long only/traditional funds offered by up to 30 different fund managers and about 90 hedge funds. Overall, the buy list is worth €10bn, including their hedge funds, Ucits, long-only funds and ETFs.
The man responsible for meeting the needs of the different desks at Eurizon is Oreste Auleta (pictured), head of wrapping and product management. Top of the list of his requirements comes as no surprise, as it is much the same for any fund selector. He says: “We look for active managers who can add extra outperformance, whether in relative terms in the mutual funds space or absolute terms in hedge fund strategies.”
Auleta’s other priorities do not come as a surprise, either. He says: “We look for consistency from the portfolio managers that we select. We need transparency in our dealings with the portfolio manager to get a proper understanding of him. And we hope that the performance can be sustained over time and in different market conditions.”
These objectives are common to most fund selectors but the question is how to achieve this goal. For Auleta, the key is in the efficiency of a selection process that begins with the ability to manage huge volumes of data on fund managers gathered from a wide range of sources.
These include commercially available databases, business meetings, capital introduction events, conferences and a range of media sources.
Successful fund analysis and selection of third-party funds depends on a well-structured, in-depth and repeatable process that is applied methodically to all prospective funds, says Auleta. Even if the process seems ‘boring’, it is the process he chooses over other more ‘fancy’ options. I
t is a question of going through the steps and rigorously analysing fund managers so as to arrive at a full understanding of their methods and their thinking. Both quantitative and qualitative analyses are carried out as part of a critical due diligence process.