Author: Tommaso Corcos, CEO, Eurizon Capital
2 Dec 2016
Growth, innovation and sustainability – these are the guidelines that steer Eurizon Capital when it comes to investors’ needs. ‘Creating value for our customers is the basis for our development’ is the company’s mantra.
We strongly believe in the importance of supporting our clients. It is here that we truly strive to make a difference. With multiple challenges facing the asset management industry, we aim to offer the right investment solutions, with the right risk profile, at the right time. For that reason our guidelines – growth, innovation and sustainability – are combined with a firm commitment to customer service and relationship building.
In terms of growth, Eurizon Capital is trying to strengthen its position in its native Italy and abroad. In the domestic market, we stand out from other players as one of the main actors in the asset management ‘renaissance’ of recent years; with around €284bn of assets under management at the end of September 2016, we are the second largest company in Italy in terms of AUM, but, above all, we ranked first for investment inflows in 2015 and in the first nine months of 2016, according to Assogestioni data.
Furthermore, Eurizon Capital is establishing itself more and more as an international player. One of the company’s main goals is international development through an expanded presence in various strategic geographical areas. First, we are putting efforts into developing a strong presence in Europe. Last July, we set up Eurizon SLJ Capital Ltd, a London-based asset manager providing investment and advisory services, with a particular focus on currency management and macroeconomic research. It derives from a partnership agreement with Stephen Li Jen and Fatih Yilmaz, the founders of SLJ Macro Partners, whose operations were incorporated into the business.
We aim to make a difference not only in terms of innovation, but also through the advisory service provided to our distributors
At the same time, we are entering French and German markets with commercial branches and, since 2013, we have been active in eastern Europe, with a hub controlled by the Luxembourg-based Eurizon Capital SA, including Slovakia’s VUB Asset Management, Hungary’s CIB IFM and Croatia’s PBZ Invest. Beyond Europe, we are particularly active in Asia, through a 49 percent stake in Penghua Fund Management (one of the leading Chinese asset managers), our own subsidiary Eurizon Capital (HK) Limited in Hong Kong (controlled by Eurizon Capital SA), and a 20 percent stake in Yi Tsai (a Chinese wealth management firm).
As our growth strategy is taking a double route, our progress in terms of innovation is also proceeding along two lines: product innovation and technological innovation. The first can be seen in the launch of new investment solutions to meet specific client needs. In the last few years, investors have been experiencing an environment never seen before: zero or even negative rates on the bond yield curve. This means a strong effort is required in order to find new return opportunities in the market. For this reason, our new investment solutions are characterised not only by a high degree of market diversification, but also by diversification of strategies within the same asset class, with a specific focus on risk factors.
Last summer, we launched a new investment solution that aims to support the development of the credit market in Europe by fostering the financing of the real economy. With the Eurizon EasyFund Securitised Bond Fund (a Luxembourg sub-fund created by Eurizon Capital SA and managed by Eurizon Capital SGR), we have introduced a groundbreaking product in our offer – an instrument designed for a market that is becoming more and more significant in Europe. With this product, we approached the structured credit market, which is currently being strengthened and promoted by the coordinated action of the European Commission (through the Capital Markets Union) and the ECB. By supporting corporate funding, this new instrument fosters the growth of the real economy and also represents an interesting alternative to traditional asset classes with regard to portfolio diversification.
Moreover, taking advantage of the expertise of Eurizon SLJ Capital, last summer we introduced an innovative product that identifies investment opportunities through a currency portfolio, based on top-down analyses of global markets. Eurizon EasyFund SLJ Global FX is a Luxembourg sub-fund created by Eurizon Capital SA and managed by Eurizon SLJ Capital, aiming at achieving positive returns by investing primarily in global currency markets. Currencies are a liquid and flexible investment solution, incorporating global macroeconomic dynamics with a low (sometimes negative) correlation with the traditional asset classes, so they offer remarkable advantages in terms of portfolio diversification.
Asset managers must innovate using a wide range of multimedia tools
We aim to make a difference not only in terms of innovation and the quality of our products, but also through the advisory service provided to our distributors. It is here that technological innovation comes into play. The digital world has widened choices even for retail investors. That is why asset managers must innovate using a wide range of multimedia tools. Over the last few years, we have been focusing on developing our digital services. In 2015, we created a website dedicated to networks of financial advisors. Through this site, which is also mobile-friendly, financial advisors can get in touch with our experts and our fund managers, and receive financial news in real time. In February 2016, we launched a new app, increasing the company’s multimedia content offering. However, the flagship of the communication strategy with our distribution networks is our business television channel. It offers more than 10 different formats, including interviews, talk shows and webinars, all created in an in-house broadcast studio, and produces more than 700 minutes of programming, live and on demand, each month.
We are constantly looking to the future, trying to stay on the cutting edge of digital services in order to improve the quality of our relationships with our distribution networks. Moving in this direction, we are studying new solutions that integrate technology with product innovation through digital advisory.
Last in our list of guidelines, but by no means least, is sustainability. This is based on our strong focus on long-term performance, and on an investment approach that aims to support the development of an efficient business environment. Our commitment to a long-horizon investment approach is demonstrated by our adherence to the Italian Stewardship Principles and the UN Principles for Responsible Investment. We were the first Italian asset manager to offer ethical funds, in 1996. Over time, these guidelines have become an integral part of our company’s investment process.
In 2014, we were among the first subscribers to the Stewardship Principles in Italy, working to promote continuous and proactive interaction with the companies we invest in. We exercise our voting rights in a transparent manner, in the interest of portfolio subscribers and market integrity, while focusing on limiting potential conflicts of interest. What’s more, we pay particular attention to the policies implemented by the issuers we invest in, convinced the adoption of correct and efficient corporate governance practices fosters the creation of value for shareholders in the long term.
I am convinced this is the right direction for the financial world. It produces positive effects for the companies involved, for investors and for the growth rate of countries; it is definitely a win-win process.