Foreign funds houses build Italy market share

Foreign funds houses continue to build their stake in the management of Italian assets, at the expense of their domestic competitors. The increase is small but is part of a slow upward trend that has been developing over time.

Data from the latest three-quarter figures from Assogestioni, Italy’s fund management association, shows foreign funds houses manage 22.6% of Italian assets, up slightly from last quarter’s 22.5%. More than half of these assets (12.9%) are in mutual funds with the rest in fund portfolios. The overall total of assets in the industry stands at €958bn, down from the second quarter’s €1,006bn.

A significant portion of Italian assets is managed by Italian fund managers domiciled abroad, mainly in Luxembourg or Dublin and France. The inclusion of these ‘roundtrip’ funds pushes the ‘foreign’ share up to 62.1%, with the Italian share at 37.9% and closed funds the remaining 9%. 

Of the Italian funds houses’ share (77.4%, including assets domiciled abroad) in Q3, just under half (36.3%) are in mutual funds and 41.1% in fund portfolios. The second-quarter figures are 77.5%, 36.7% and 40.8% respectively.

Redemptions in the third quarter have accelerated, accounting €11.7bn, up from last quarter’s €6.7bn. Most of the losses last quarter were in fund portfolios (-€4.9bn) with the rest (-€1.7bn) in mutual funds. This time, the losses are mostly in mutual funds (-€9.3bn).

Equities have suffered most (-€4.2bn), compared to net inflows last quarter of €407m. Fixed income funds have lost €1.8bn, an increase on last quarter’s losses of €545m; balanced funds recouped lost ground, with losses of €2bn from last quarter’s €3.2bn; and cash gained massively, restricting losses to €967m, compared to last quarter’s €3.2bn.

Assets in fund portfolios, as opposed to assets in mutual funds, continue to gain popularity. A decade ago, the split between the two sectors would typically be 65% in mutual funds and 35% in fund portfolios. Data for the latest quarter confirms this trend, showing that mutual funds now account for only 49.2%, down from 49.8% last quarter. 

The three largest banking and insurance groups in Italy continue to dominate the asset management sector. Gruppo Intesa Sanpaolo, with its two asset management subsidiaries Eurizon Capital and Banca Fideuram, is the biggest player in the Italian asset management industry, with a 20.3% share of the market. Second comes the insurance group Generali, with 16%. Third comes Unicredit’s Pioneer Investments, with 10.9%, followed at some distance by Gruppo Mediolanum (3.3%), AM Holding (4.1%) and Allianz (3.7%).

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