Strategy interview: Italian, global and ready for growth | Interviews

Carlo Trabattoni

  • 2017-: CEO, Generali Investments
  • 2016-17: Head of Distribution and Advisor to the CEO, Santander Asset Management
  • 1996-2016: Various roles at Schroders, from Country Manager Italy to Head of Pan-European Distribution and Global Financial Institutions Group

Generali Investments

  • Assets under management: €583.3bn (end of 2021)
  • Institutional third-party outstandings: €95.7 billion
  • Capabilities: fixed income, equities, liquid alternatives, multi-asset and liability-focused investment real assets
  • €56 billion deployed in real assets at the end of 2021, including equity and real estate debt, infrastructure debt, private equity and private debt
  • Multi-boutique platform – Aperture Investors (return-oriented active manager), Lumyna (alternatives), Plenisfer (absolute return), Sycomore (sustainability)
  • Locations: Milan, Trieste, Paris, Cologne

At Generali Investments, things were already going fast before COVID-19 and the end of the bull market. Over the past three years, the Milanese leader has contributed to the realization of the parent company’s “Generali 2021” strategic plan and initiated the group’s new strategic plan, which sets even more ambitious objectives for 2024.

The new plan, dubbed “Partner for Life 24: Engine of Growth”, aims to transform Generali into a “partner for life” for its customers, focusing, among other things, on data-driven innovation and sustainability. Increasing the share of assets managed by Generali Investments on behalf of external clients is one of the main priorities of the plan. Over the three-year period, Generali Investments was tasked with increasing third-party revenue by €100 million.

At the end of last year, Generali Investments managed 96 billion euros on behalf of external institutions, according to the Top 500 Asset Managers study by IPE. This represented an increase of more than 11% on the previous year, but it was still well below the figures reported by the asset management businesses managed by the other two European insurance giants, Allianz and AXA.

To drive third-party revenue growth, the company aims to expand its geographic footprint in Europe, the UK and Asia to attract new customers and add more business to existing ones. The core of the strategy rests on three main pillars: leveraging expertise in Liability Driven Investing (LDI); the development of the real assets platform and the growth of the multi-store platform. The latter includes Aperture Investors, an active manager offering performance fee structures; alternative platform Lumyna; active manager Plenisfer and sustainability specialist Sycomore, as well as Generali Real Estate and Generali Global Infrastructure.

Carlo Trabattoni, CEO of the group’s asset and wealth management business unit since March 2021, says the company is on track to meet its targets. “We are aware that we have a long road ahead of us. But we believe existing and potential clients will recognize the value we can bring by offering a specialist skill set, as well as the opportunity to co-invest with a leading insurance client,” says the CEO.

“We are further strengthening our core LDI capabilities for pension funds, insurance companies and endowments. Another pillar of our growth is the real assets segment where we have already deployed more than 56 billion euros at the end of last year in real estate, debt infrastructure, private equity and private debt. .

LDI is a core capability, but Trabattoni says the company has yet to make progress in key LDI markets, including the UK and the Netherlands, in part due to the importance of consultants in those markets. .

Marketing strategy

He says: “It may seem strange, but we have very limited visibility with consultants. Indeed, we first sought to serve our internal customers, then we turned to external customers in an opportunistic way. Now that we have an explicit strategy for developing third-party assets, we need to strengthen our marketing activities, particularly if we are to grow in markets where relationships with institutional clients are mediated by consultants, such as the UK , the Netherlands or the Nordic countries. countries. In general, we want to start being noticed by international consultants as a competitive manager for international searches.

In the private markets sector, this year the company has been busy launching sustainable products. Three diversified funds of funds, classified as Article 8 funds under SFDR, have been launched on the German market. In Italy, the company launched an Article 8 health-focused private equity fund. The Lumyna platform has also launched a long-short article 9 equity fund. “By the end of the year, we will launch other funds in the area of ​​liquid debt and equities, private assets and real estate,” says Trabattoni.

The share of private market investments invested in private debt was 7 billion euros at the end of last year, which leaves room for growth for this asset class. Trabattoni says: “We want to develop our skills in the area of ​​private debt because we believe that institutional investment in this asset class is a structural trend. Investor interest may fluctuate based on macroeconomic factors such as inflation, but over the long term, we believe investors will build structural allocations to private debt.

The multi-boutique platform is up and running and Trabattoni says now is the time to grow it organically, rather than following the “mergers and acquisitions frenzy”. The CEO was hired in 2017 by Santander Asset Management to develop this key area of ​​the business.

He says: “We made the decision to bring new businesses to life and invest in existing ones that needed to grow, and we tried to launch products with a decent size initial investment of between, say, 300 million euros and 500 million euros. We have strived to find active specialist strategies to increase our competitiveness. In each case, however, the selection of strategies was in line with the strategic asset allocation needs of the parent group.

The portfolio of specialist managers is complete with sustainability-focused outfits, which is indispensable in today’s sustainability-focused market. Some of these companies, Sycomore in particular, have set the bar high for sustainability and have a long track record in this area. They have the freedom to set their own criteria, Trabattoni points out.

However, today’s clients focus on all parts of an asset management business. Trabattoni says the company’s strength in sustainability also lies in the relationship with the parent group and its insurance subsidiaries. This is a wide range of clients who define exclusion criteria and commitment programs, which Generali Investments must follow.

Even so, the best defense against accusations of greenwashing is to “do business with transparency, clear commitments and a pragmatic approach,” says Trabattoni.

“ESG investing has been increasingly thrust into the spotlight by recent news which I would say marks a turning point for our industry. For us, sustainability is an important factor in investment decisions and we strive to always strike the right balance between the performance demanded by our investors and a positive contribution to society as a whole.

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