Finland’s Evli eyes Italian institutions for expansion
Finnish wealth and asset manager Evli sees opportunities in the growing appetite for foreign managers’ products in the Italian market.
Despite its political instability and economic stagnation, the Italian asset management industry has seen strong growth through the past year into 2014.
In January alone, mutual funds posted net inflows of some €3.9bn, helping take overall industry AUM to some €1,335bn. Foreign domiciled funds have taken a significant share of the inflows in the past year, through a number of product types including flexible products, equity and balanced funds.
Amid this demand, there has been a significant move by some of the largest players – houses such as BlackRock, Franklin Templeton, Fidelity, and so on – attracted by the business returns on offer in a country where public debt is very high, but private debt is not and consequently Italian savers’ money tends to come in a steady flow.
But big players are not the only ones who have spotted an opportunity for profits in the country. Evli, a private bank and wealth management company based in Finland, has also been trying to enter the market for the last couple of years and seems close to reaching its goal.
Established in 1985, Evli provides wealth management, equity and derivatives brokerage, investment research and corporate finance services to private investors, entrepreneurs and institutions. Headquartered in Helsinki, its principal markets are located around the Baltic Sea: Finland, Sweden, Russia, Estonia and Lithuania.
Evli Group employs around 250 people and manages equity capital of €48.8m, with a BIS capital adequacy ratio standing at 13.9% as of December 31, 2013. Evli’s total assets under management stood at €7.8bn at the end of 2013.
“Evli is a privately owned bank, one of the few left in Scandinavia to offer brokerage services to local and international investors. For the past 15 years, European corporate bonds have become a very popular way to increase capital in the continent and that’s where we have built one of our core areas of expertise,” says Petter von Bonsdorff, partner at Evli Bank.
As von Bonsdorff explains, Evli Bank has been eyeing Italy to grow its business for the last couple of years and has gone through a series of different approaches.
“We have been trying to launch our services in Italy for the past two years and it took us a little while to adjust our business mentality to the local one and understand what the best way to go about it was,” von Bonsdorff says.
Eventually, the Finnish bank decided to resort to the help of local advisers to make its name familiar to local investors. “In the beginning we obviously had an issue with brand recognition, but more recently working with local advisers has started to pay off and our brand recognition has increased,” he says.
“Meeting investors, working with them face to face and learning how to rearrange the distribution with the relevant person have all been very precious acquisitions that we have made over the last period.”
Von Bonsdorff explains that the company will be targeting institutional investors in Italy and aims to offer them core expertise in European corporate bonds as well as actively managed equity products. Asked whether Italy has been a challenging market to enter due to its commonly known high level of bureaucracy, von Bonsdorff says that he did not notice more red tape than in other countries across Europe.
“The Italian market has not been harder than others to crack. We only had to understand the rules of the game. For instance, many investors we talk to have been reluctant to start doing business with us because our products are not on any platform at present. So that’s what we’re looking at now,” he says.
Maintaining the speed, learning what’s required and targeting platforms more than going straight into registering the funds are the main bullet points on Evli’s agenda to establish its presence in Italy.