ITALY - The role of foreign fund managers in the Italian pensions market will increase with transparency and regulatory pressure, says Massimo Greco, managing director and country head at J P Morgan Fleming Asset Management.
At present the top three players in the closed pension funds market in Italy are domestic asset managers Sanpaolo-IMI, Generali and Pioneer Investments. In the open pensions funds market the top three positions are taken by Nextra, Arca and MontePaschi.
Speaking at the PensMart fifth Annual European Pensions Market Forum in Frankfurt yesterday, Greco said that the role of the foreign fund manager could increase.
Transparency regulations will be a key issue in pushing forward the role of foreign managers. Indeed, transparency is still very much lacking in the Italian pensions market. Says Derek Collen, partner at IAMA Consulting: "There would never be a mis-selling scandal in Italy, as there is no regulation."
If transparency and regulatory issues are tackled, there are a series of steps that foreign managers should follow if looking to enter the Italian market. First they should obtain a wide knowledge of the Italian pension funds environment, says Greco. This they can do by speaking with consultants, such as Prometeia or IAMA. Then they must define clearly the market segment that they want to be in - whether it is defined contribution, sub-adviser or private clients.
Decisions will then need to be made as to how they want to enter the market - alone or through acquisition, the latter of which is not recommended by Greco. One example held up during the conference was Credit Suisse Asset Management. CSAM was praised, and hailed as a unique success story as it clearly defined the segment it wished to be in, and on its own moved into the market.
However warned Greco, while foreign managers do stand a chance at making their mark in the Italian pensions market, there is not room for everyone.