ITALY - Italian asset managers are being forced to move towards international standards as numerous foreign players enter the market, European regulation takes hold and investors hunt performance.
In November, Global Pensions exclusively reported European firms charging the Italian market and now Fitch Ratings has published a special report on the effects this is having on the local market and the Italian players.
"Faced with these changes and a shift in investors' needs towards more innovative strategies, Italian asset managers will have to develop and adapt to compete with international players in the longer term," said director at Fitch in the fund and asset manager rating group Charlotte Quiniou.
“As a result, the Italian market is converging with international standards in corporate governance, investment management sophistication, communication and risk management practices, among others,” she said.
Until recently, the Italian asset management market was dominated by local managers, but now Dutch manager Cordares and Austrian player Raiffeisen have declared to be expanding their business in the region.
At end-June 2006, Italian assets under management were approaching almost €1trn, making it one of the largest markets in Europe.
Although the vast majority of assets were held within the mutual fund market, the institutional side has been tipped for development in light of the 1 January pension reform.
The reform, which had first been postponed to 2008 and was then brought forward by a year, aims to stimulate the complementary pensions sector by encouraging workers to transfer their final indemnity payments to pension funds.
"There is considerable growth potential,” said senior director at Fitch Aymeric Poizot. “The long-awaited pension fund reform should boost the development of the complementary pension market, and hence fuel the expansion and dynamism of the asset management industry," he added.
Although the move into Italy by European managers has effected the local players, Andrea Canavesio, partner at Mangustarisk had told Global Pensions the foreign firms will need to focus to succeed.
“You really need to get under the Italians’ skin in order to compete against the local players,” Canavesio had said.
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