the italian am mkt key facts

The Italian Asset Management market key figures

1. The Italian Asset Management market

2. The European Investment Fund Industry 3. Savings & Wealth

1. The Italian Asset Management market

2. The European Investment Fund Industry 3. Savings & Wealth

The Italian AM market (Jan 2014:Dec 2014)

AuM, net flows & performance, â‚Źbn.

4

Net flows (monthly data) 20 18 16 14 12 10 8 6 4 2 0 -2 -4 -6 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec â‚Ź bn 2012 2013 2014

5

Monthly data. Source: Assogestioni.

Product breakdown +19.3 +0.44

+27.0

+19.7 +25.4

IV +0.44

III

II

684 43%

2014 I

Open-end Funds Retail Mandates (discretionary portfolios) +3.2

+2.3 +2.1 +2.1 2014 I

IV

43

II

44 3% 4%

-0.06 2014 I

+0.12

III

II Closed-end Funds Institutional Mandates

114 744 7% 47%

+9.2

+9.1

IV

IV

+10.4

III

+2.9 2014 I

II

III

6

Long term trend

7

€bn, yearly data. Source: Assogestioni.

Top 15 Groups 2013

Net flows – 2014

AuM (Dec 2014)

0% 3% 6% 9% 12%15%18%21%24% 0%

GENERALI

26%

EURIZON CAPITAL

15%

5%

10%

15% 20%

3

6 9 Net sales as %AuM

25%

BANCA FIDEURAM PIONEERINVESTMENTS POSTEITALIANE ANIMA HOLDING ALLIANZ UBI BANCA MEDIOLANUM AMUNDI BANCOPOPOLARE AZIMUT BNPPARIBAS AXA ARCA FRANKLIN TEMPLETON

€bn

0

40

80

Funds

120

Mand.

160

x%: Mkt share

200

0

4

8

12 16 20 24 28 32

0

12

15 8

Open-end funds: domicile breakdown Dec 2014

684 Dec 2010

460

29% 30%

Dec 2013

557

20%

41%

42%

2014 +32.2 +30.7 +28.5

Domestic R-trip/ Offshore Foreign

38% 30

20 20 10

15

0 10

-10 -20

5 -30 0

-40 2011

2012

2014 I

2013

2014 II

2014 III

2014 IV

9

AuM & net flows, €bn.

Top 15 Groups (open-end funds only) Net flows – 2014

AuM (Dec 2014)

0%

EURIZON CAPITAL

10%

20%

30%

2013 40% 0%

6%

12% 18% 24% 30%

%

BANCA FIDEURAM PIONEERINVESTMENTS GENERALI ANIMA HOLDING %

MEDIOLANUM FRANKLIN TEMPLETON AZIMUT ARCA

%

JPMORGAN UBI BANCA %

INVESCO

%

SCHRODERS PICTET AMUNDI 6%

BANCOPOPOLARE

€bn

0

10

Domestic

20

30

40

R-trip/ Offshore

50

60

70

Foreign

80

90 100 110 0

x%: Mkt share

4

8

12

16

0

1

2

3

Net sales as %AuM

4

5

6

10

Asset Class breakdown TOTAL

21%

DOMESTIC

9%

R-TRIP/ OFFSHORE

4%

248 bn – 38%

21%

FOREIGN

34% 0%

Equity

207 bn – 32%

197 bn – 30%

20%

Balanced

40%

60%

Money Market

Bond

80% Flexible

100% Hedge 11

December 2014.

Equity & balanced funds Net flows – 2014

AuM (Dec 2014)

0%

10%

20%

30%

40%

2013 50%

0%

10%

20%

30%

40%

ITALY EUROAREA EUROPE AMERICA PACIFICAREA EMERGINGMKTS SPECIAL. COUNTRY GLOBAL SPECIAL. SECTOR

%

OTHER

BALANCED

€bn

0

5

Domestic

10

15

20

R-trip/ Offshore

25

30

Foreign

35

40

45

x%: Mkt share

0

2

4

6

8

10

12

0

2

4

Net sales as %AuM

6

8

12

Money mkt, Bond, Flex & Hedge funds Net flows – 2014

AuM (Dec 2014)

0%

10%

20%

30%

40%

2013 50%

0%

8%

16%

24%

32%

40%

MM FUNDS

3%

ITALY EUROGOV. SHORTT. EUROGOV. M/LTERM EURO CORPORATE/ HY DOLLARAREA

3%

GLOBAL EM

%

MIXED SPECIALIZED FLEX(BOND)

FLEX +42

HEDGE

€bn

0

20

Domestic

40

60

80

100

R-trip/ Offshore

120

Foreign

140

160

0

2

4

6

8

0

10

6

12

18

24

Net sales as %AuM

x%: Mkt share

30

13

Net & gross flows Net (€ bn)

30

100 90

Gross (€ bn)

80

20

70 10

60 50

0

40 30

- 10

20 10

- 20

0 Q1 2009

Q2

Q3

Q4

Q1

Q2

2010

Q3

Q4

Q1 2011

Q2

Q3

Q4

Q1 2012

Q2

Q3

Q4

Q1 2013

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2014

50% 40% 30% 20%

Gross Sales

Gross Redemptions

Net Sales

Fundsw/Net Sales>0 14

The blockbuster effect : top quartile funds take all

50 40 30 20 10 0 -10 -20 -30 Q1 2009

Q2

Q3

Q4

Q1 2010

Q2

Q3

Net flows, €bn.

Q4

Q1 2011

Q2

Q3

I

II

III

IV

Q4

Q1 2012

Q2

Top 1%

Q3

Q4

Q1 2013

Q2

Q3

Q4

Q1 2014

Q2

Q3

Q4

New Stories

15

New stories: they sell well... but how long?

16 14 12 10 8 6 4 2 0 -2 Q1 2009

Q2

Q3

Q4

Q1 2010

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2011

Q1

Q2

Q3

2012 Curr.

+ 1Q

+ 2Q

Q4

Q1 2013

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2014

+ 3Q

Newly launched funds (‘new stories’): net flows in current & following 3 quarters. €bn.

16

New stories tag cloud Year New funds

2011 536

2012 578

2013 560

2014 456

17

Mandates: AuM & Net Sales trends Net flows – 2014

AuM (Dec 2014)

0%

10%

2013 20% 0%

2%

4%

6%

8%

10%

6 9 Net sales as %AuM

12

15

DISCRETIONARY MANDATES(GPF)

DISCRETIONARY MANDATES(GPM)

PENSION PLANS

INSURANCEPRODUCTS (TRADITIONAL)

61% 2

INSURANCEPRODUCTS (UNIT& INDEXL-ED)

OTHER

€bn 0

20 Foreign Co.

40

60

Domestic Co.

80

100

0

x%: Mkt share

5

10

0

3

18

Top 15 Groups (mandates only) Net flows – 2014

AuM (Dec 2014)

0%

GENERALI

42%

EURIZON CAPITAL

15%

4%

2013

8% 12% 16% 20% 24% 0%

5%

10%

15%

20%

BANCA FIDEURAM POSTEITALIANE

%

PIONEERINVESTMENTS ALLIANZ

%

AXA UBI BANCA BANCOPOPOLARE AMUNDI %

ANIMA HOLDING CREDIT SUISSE CREDITOEMILIANO BNPPARIBAS

%

STATESTREET MONTEPASCHI

€bn

0

10

20

Retail

30

Instit.

40

50

60

0

3

6

9

12

15

18

0

2

4

6

Net sales as %AuM

x%: Mkt share

8

19

The market for Institutional Mandates Insurance products

Managed

by ManCos

Pension funds

As is ...

As is ...

(2014 Q3)

(2014 Q3)

502

39% 183

79% ... and as could become:

Household portfolio: share of insurance products & pension funds (2014Q3) IT FRA GER UK USA 18.5% 33.5% 30.9% 57.4% 33.4%

Source: ANIA, Covip, Adepp, Assogestioni, Eurostat, OECD.

20

Some tentative explanations that can be drawn looking at the general features of the market (1), savers (2 & 3), distributors (banks, 4 & 5) and management companies (6).

1. A pro-cyclical market

MSCI WORLD (Loc)

â‚Źbn, yearly data. Source: Assogestioni, MSCI.

22

2. Wealth is concentrated top tier investors hold most of the money pot (italian funds, 2013)

Average investment

Average ≈ Median

Median investment

Limit (€)

% of assets

Quartile

75% of shareholders invest less than 27k€

25% of shareholders 75% of assets

23

Italian funds. Source: Assogestioni

3. Bank deposits pay low interests 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2003

2004

2005

2006

2007

2008

Interest rates on bank deposits, households. Source: Bank of Italy.

2009

2010

2011

2012

2013

2014

Dec

24

4. Banks are becoming less dependent on funding from retail 30

20

10

0

-10

-20

-30

-40 2007 Q2 Q1

Q3

Q4 2008 Q2 Q1

Q3

Q4 2009 Q2 Q1

Q3

Q4 2010 Q2 Q1

Retail Bank Bonds

Q3

Q4 2011 Q2 Q1

Q3

Q4 2012 Q2 Q1

Domestic and Round-Trip Funds

Q3

Q4 2013 Q2 Q1

Q3

Q4 2014 Q2 Q1

Q3

Foreign Funds

25

Quarterly flows, €bn. Source: Assogestioni, Bank of Italy.

5. Decrease in net interest margin 25

10

20

9.5

15

9

10 8.5 5 8 0 7.5 -5 7

-10

6.5

-15

6

-20 Q1 2009

Q2

Q3

Q4

Q1 2010

Q2

Q3

Q4

Q1 2011

Domestic and Round-Trip Funds (l.)

Q2

Q3

Q4

Q1 2012

Foreign Funds (l.)

€bn. Source: Assogestioni, bank balance sheets (Top 5 groups).

Q2

Q3

Q4

Q1 2013

Q2

Q3

Q4

Q1 2014

Q2

Q3

Q4

Net interest margin (Top 5 Banking Groups) (r.)

26

6. The success of funds with high margins (target-date funds) Net flows – 2014

AuM (Dec 2014)

0%

10%

20%

30%

40%

2013 50%

0%

8%

16%

24%

32%

40%

MM FUNDS

3%

ITALY EUROGOV. SHORTT. EUROGOV. M/LTERM EURO CORPORATE/ HY DOLLARAREA

3%

GLOBAL EM

%

MIXED SPECIALIZED FLEX(BOND)

FLEX +42

HEDGE

€bn

0

20

Domestic

40

60

80

R-trip/ Offshore

100

120

Foreign

140

160

0

2

4

6

8

10

x%: Mkt share

1. The Italian Asset Management market

2. The European Investment Fund Industry 3. Savings & Wealth

0

6

12

18

Net sales as %AuM

24

30

27

Net Assets by fund domicile +15%

+18% 3,095 +10%

+13% 1,582 +9%

11,232 +9%

+24%

+3% 1,571 +1%

1,661 +9% Ucits

+16%

1,303 +16%

Non-Ucits :’14 M12 Growth ‘13 rate

72%

25% MMFs

+18%

422 +20%

Germany 14%

+22%

254 +10%

90% Spezialf.

France 14%

UK 12%

Switzerland 4%

Italy 2%

Luxembourg 28%

46%

Ireland 15%

Europe 100%

43% 29

2014 December €bn. Source: Efama, AFG, BVI.

Net Assets by fund domicile – Long-term growth

600 500

Ireland 400

Lux embourg 300

UK

200

France Germany

100

Italy 0 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014 Q3

Index values. Source: Efama.

30

Net sales by fund domicile -5%

-3%

+1%

-1%

Germany

France

Italy +3%

2014 III II I

+5%

-5%

-3%

+1%

-1%

+3%

+5%

+5.4%

-5%

-3%

-1%

+1%

+3%

-2

+28

+5% +57

2009

-5%

-3%

+1%

-1%

Europe

Luxembourg

UK III

+3%

II I

+5%

-5%

-3%

+1%

-1%

+3%

+5%

+27 2014

+210

2

3

-5%

-3%

-1%

+1%

+3%

+5% +493

%

+8% 2009

31

Net sales as a % of AuM. Yearly data in â‚Źbn. Source: Efama, BVI.

Net sales by fund domicile & asset class -3%

+1%

-1% 2014

III II I

+3%

+5%

-5%

-3%

-1%

+1%

+3%

+5%

-5%

-3%

-1%

-5%

-3%

-1%

+1%

+3%

+5%

+3%

+5%

4.5%

-

2009

UK -5%

Germany

France

Italy -5%

-3%

-1%

Europe

Luxembourg

+1%

+3%

III II I

+5%

-5%

-3%

-1%

+1%

+3%

+5%

+1%

2014

3%

3%

2%

'10 '09

Equity+Balanced +Flexible Net sales as a % of AuM. Source: Efama, Assogestioni, BVI.

Bonds+MM

Others+Non-Ucits 32

Net Assets by fund group domicile 11,057 3,007 59% +18% +10%

2,288 +15% Domestic Funds - Ucits Domestic Funds - Non Ucits

1,600 44%

Luxembourg Funds Irish Funds

8% %

France 13%

Germany 24%

UK 44%

Switzerland 51%

Italy 49%

’14 :Q3 Growth rate ‘13

Luxembourg

Ireland

Europe

33

2014Q3. €bn. Foreign (Round-trip) share in %. Est. on Efama, Assogestioni, ALFI & IFIA data.

Net sales: fund domicile vs. fund group domicile Italy -5%

-3%

France

+1%

-1% 2014 III II I

+3%

+5%

-5%

-3%

+1%

+3%

+5%

-5%

-3%

-1%

+1%

+3%

+5%

+3%

+5%

IV

-10%

2010 2009

-3%

-1%

Europe

Luxembourg

UK -5%

-1%

Germany

+1%

+3% III II I

+5%

-5%

-3%

-1%

+1%

+3%

+5%

-5%

-3%

-1%

+1%

2014

% 2009

Net sales as a % of AuM. Fund domicile (blue), fund group domicile (black). Est. on Efama, Assogestioni, ALFI, IFIA & BVI data.

34

1. The Italian Asset Management market

2. The European Investment Fund Industry 3. Savings & Wealth

Household saving rates in Europe 25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

0% 96 97 98 99 00

01

02

03

EU avg

Gross household saving rates. Source: Eurostat.

04

Italy

05

06

07

Germany

08

09

10

France

11

12

13

14 Q3

UK

36

How income & consumption % affect saving rates

1.5%

∆ consumpt ion

1.0%

16% 0.5%

14%

13 %

12% Ita

0.0%

10% - 0.5%

- 1.0%

- 0.5%

0.0%

0.5%

2013

2012

1.0%

2014 Q3

- 1.5%

2011

- 1.0%

2010

2009

8%

∆ income

37

2008Q4:2014Q3. Source: Eurostat.

How income & consumption % affect saving rates

1.5%

1.0%

16%Germ

0.5%

14% 12% 10%

0.0%

- 0.5%

0.0%

0.5%

1.0%

1.5%

2014 Q3

- 1.0%

2013

- 1.0%

2012

2009

- 0.5%

2011

18% 16% 14 14% 12% Fra 10% 2010

∆ consum ption

18% 17.0%

∆ income

2008Q4:2014Q3. Source: Eurostat.

38

How income & consumption % affect saving rates

1.5%

∆ consump tion

1.0%

0.5%

8%

0.0%

6%

- 0.5%

4%

%

1.5%

2.0%

2 .5%

2014 Q1

1.0%

2013

0.5%

2012

0.0%

2011

2009

- 1.0%

2010

2.2% 2%

∆ income

39

2008Q4:2014Q1. Source: Eurostat.

Household financial portfolio breakdown

Bonds Total Asset € bn

Currency & deposits

Total

High invest m ent

Stocks

Issued by banks

Total

Listed

Investment funds

Pension funds & life pr

Italy 1995

1,797

38.3

22.7

1.9

19.3

2.8

5.8

8.8

2000

3,042

22.9

16.5

6.4

29.5

5.4

17.0

10.0

2005

3,713

24.6

19.8

7.4

25.3

2.5

11.5

14.7

2010

3,732

29.9

19.1

10.0

22.4

1.9

7.2

17.1

2012

3,775

31.2

18.7

9.9

21.2

1.5

7.2

17.6

2013

3,873

31.1

16.1

8.4

23.1

1.6

7.8

18.0

2014 Q3

4,016

30.4

14.8

6.3

23.3

1.7

9.2

18.5

France

4,713

28.2

1.7

n.a

21.5

3.9

6.5

33.5

Germany

5,175

39.1

4.0

n.a

9.8

4.6

9.4

30.9

UK

7,328

24.5

0.7

n.a

9.1

7.1

4.0

57.4

USA

53,053

13.5

4.8

n.a

33.1

n.a

13.1

33.4

%. Source: Eurostat, OECD, BCE, Deutsche Bundesbank.

dir ect

Significant bank issued bonds Negligible list ed shar es. unlist ed

Funds

Pensions/ life pr oduct too modest 40

Managed products in household portfolios Investment funds

Pension funds & life products

abnormally high?

20%

60%

18% 50%

16% 14%

40%

12% 30%

10% 8%

20% too low?

6% 4%

10%

2% 0%

0% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Q3

Q3

Italy

Fr ance

Ger many

United Kingdom

USA 41

Source: Eurostat, OECD, BCE, Deutsche Bundesbank.

Public Pensions (1st pillar) Future substitution rates

Cost (% GDP)

Old-age pensions

90%

71

85%

1

70

80% 2

3

75%

69

70% 4

65%

68

60% Today

67

55% 50%

1

ante L 243/2004

2

ante DL 78/2010

3

ante DL 98/2011

4

ante DL 201/2011

66

45% 40%

65 2010 Age

Source: Ragioneria Generale dello Stato.

2020

2030

2040

Private sector employee

2050

2060

Self employed

42

Private sector employees: failure of automatic enrolment 1 3 .7m

1 3.5m 341 K

Not Enrolled

68 %

84% 3 2% 6%

15 % Enrolled

4 .4 m Dec 2 006

2007

2 008

2009 New m embers:

2010

20 11

Automatic Enrolm ent

2012

201 3

Dec 201 3

Voluntary Enrolm ent

43

Source: est. based on Covip data.

Private pension plans at a glance (2nd & 3rd pillar) 2013

Member breakdown Private sector employees Public sector employees Self-employed

2008

(,000)

Working pop. (est.)

Membership rate

Membership rate

6,204

22,420

28%

21%

4,356

13,543

32%

26%

160

3,335

5%

4%

1,688

5,542

30%

19%

2013 Members (,000)

Assets

% '13 ∆ % 5y ∆ %

(€ m)

Vehicle breakdown

6,204

100%

+6%

+28%

Contractual p.f.

1,951

31%

-1%

-5%

34,504

985

16%

+8% +24%

11,990

2,639

42%

+14%

+92%

19,513

655

11%

-1%

-3%

50,376

Open p.f.

Ind. Insurance Plans (PIP) Ante 1993 p.f. ('pre-existing')

Source: Covip, Istat, RGS.

116,443

%GDP 7.5%

44

The Italian Asset Management market key figures