Foundations pool to create multi-manager Fondaco
ITALY - Three Italian foundations are joining forces to set up a Luxembourg-based pooled investment vehicle, in a bid to win economies of scale.
Compagnia di San Paolo, Fondazione Padova e Rovigo and Fondazione Bologna will present authorisation filings in the next few weeks to regulatory authorities in both Luxembourg and Italy for new firm - Fondaco Luxembourg SA - and a multi-manager fund.
Compagnia intends to transfer €2.45bn of its assets to the multi-manager fund, including €1.6bn in fixed income, €300m in European equity and €550m in international equity.
Assets at Fondaco will managed by 15 different managers but how much the other partners will transfer has yet to be disclosed.
Italian asset management company Fondaco SGR, which was created in 2002 and is largely owned by the three foundations as well as independent asset management firm Ersel, will manage the establishment of the new project. Compagnia already outsources most of its operations and direct management functions to Fondaco SGR.
More importantly, these three foundations are now keen for other investors - foundations, endowments and pension funds - to get involved in the venture.
"A foundation can participate in the project either as a shareholder of the dedicated asset management firm being set up, or as an investor in a fund or compartment which can be appositely set up based on the foundation's needs," said Davide Tinelli, chief financial officer of Compagnia.
"A dedicated and independent firm such as Fondaco SA will offer European institutional investors the opportunity to execute their own strategy at the lowest cost and the highest level of professional quality and independence," added Tinelli.
He believes the most interesting part of the venture was each investor would sit on the new vehicle's board and be able to discuss their issues or problems with advisers or managers and with the degree of disclosure they seek.
"The new vehicle is a way of easing the administrative burden of segregated accounts, while keeping full control of both investments and costs in a way that is not possible with pooled funds," he said.
The foundation is said to have chosen Luxembourg as its domicile for investment because of its operational standards, tax and regulation.