Rome-based fund selectors miss Milan’s financial scene

While Rome is Italy’s political capital, the country’s economic and financial hub is almost entirely located in Milan, the capital of the Lombardy region which accounts for 9% of Italy’s GDP.

Due to the peculiar geographical dichotomy of the country, fund selectors at banks headquartered in Rome are faced with some challenges in running their daily due diligence on funds.

Olivier Mugnier, fund selector at Banca Finnat, a private bank based in Rome which offers asset management services mainly to high net worth individuals in the region, confirms that the capital’s financial industry feels somehow detached from the dynamism of Milan, where trends and new products are presented first.

“We have more limited access to financial information. International portfolio managers tend to spend most of their time in Milan and we miss the direct interaction with them,” he says.

Mugnier has adapted the fund selection process accordingly, favouring a quantitative approach over qualitative due diligence.

For selected funds, he follows up his analysis with face-to-face meetings which require one-day trips to Milan, where Finnat has a representative office.

“I need to be in Milan for key meetings, where I also get a flavour of new products and trends. My background is of a portfolio manager and I miss the personal interaction between managers and selectors,” he adds.

But according to Mugnier, the lack of access to market information could also have positive effects.
“We are forced to analyse more in-depth the funds we shortlist. We are also able to evaulate them with greater objectivity, as our view is not directly influenced by fund houses,” he says.

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