La consultora estadounidense Cerrulli Associates dedica en su edición de abril 2015 (The Cerrulli Edge-Global Edition), dentro del apartado Europa, un artículo sobre los gestores de fondos de inversión en España e Italia. En la página 18 dedica un apartado al asesoramiento automático en fondos de inversión en referencia a Feelcapital y su CEO, Antonio Banda.

1. Page 16 • The Cerulli Edge—Global Edition • April 2015
The Southern Crucible
Fund managers in Spain and Italy need
to prove themselves if a windfall is to
become a long-term opportunity
Summary
With rock-bottom bank accounts’ yields pushing savers in Italy and Spain
into investment funds, asset management is enjoying significant growth.
Business opportunities are opening up for foreign managers, but they
must be ready to negotiate the different elements at play in the two lead-
ing countries of Southern Europe.
Key Take Aways
• Italy’s asset management industry hits record highs, while its Spanish
counterpart grows 30% year on year.
• Large, high-profile banks hold sway in distribution in both countries.
• Italy allows mutual funds listing, Spain mulls over this option.
Europe
IItaly and Spain are still suffering the ef-
fects of the financial crisis with both coun-
tries nursing high employment rates. The
Italian economy shrunk by 0.4% in 2014,
and while Spain’s grew by 1.4% last year,
European Commission president Jean-
Claude Juncker doubts the country is fully
on the road to recovery.
Both countries have, however, seen a sus-
tained growth in their fund management in-
dustries. In Spain, total assets under
management (AUM) amounted to €192 bil-
lion ($206.6 billion) at the end of the third
quarter of 2014, up from €145 billion a year
earlier, according to the Comisión Nacional
del Mercado de Valores (CNMV), the agency
in charge of supervising and inspecting the
country’s stock markets. In Italy, fund man-
agers’ association Assogestioni reported that
at the end of 2015, assets hit a total of nearly
€1.6 trillion, €684 billion of which were mutual
funds, the balance being managed as segre-
gated funds, pension assets and insurance
portfolios. This was the best result since the
turn of the century.
Pay a pittance
Despite the challenging economic envi-
ronment, both countries have untapped pools
of wealth, trickling out of bank accounts into
funds as savers bow to the inevitable: it’s
simply not tenable to leave cash parked in
bank accounts, while they pay a pittance. In
Italy this is translating into demand for “flexi-
ble”, absolute return funds, which collected
the lion’s share of mutual funds’ inflows
(€42billion) and are top priority for fund man-
agers. Italians are also turning to tied agents
for advice. Spain too is buying into diversifi-
cation, albeit within fixed income.
-€8,000
-€4,000
€0
€4,000
€8,000
€12,000
€16,000
2014 III2014 II2014 I2013 IV2013 III
MixedOthersMonetaryBondEquity MixedOthersMonetary
Spain Italy
BondEquity
€503
€1,461
€1,385
€997
€141
€2,865
€4,390
€3,992
€3,777
€3,625
€465 €21
-€161
-€821
€122
€3,548
€4,765
€5,729
€3,272
€195
€801
€2,490
€3,536
€6,339 €6,474
€2,085
€3,093
€2,559
€1,836
€3,434
-€702 -€695
€9,279
€5,817
€8,894
-€1,500
-€1,421
-€1,174
-€3,107
€1,064
-€179
-€2,257
-€142
€1,279
-€82
€7,296
€7,136
€14,926
€13,889
€13,730
Despite the challenging economic environment, both countries have untapped pools of wealth, trickling out of bank accounts.
Sources: Cerulli Associates, Assogestioni, CNMV
Italian and Spanish Mutual Funds by Quarterly Net New Flows, July 2013–September 2014
(€ millions)
While still
relatively
marginal to the
average Spanish
portfolio, global
equity was the
second fastest
growing asset,
having posted
a 188%
surge rate.
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2. April 2015 • The Cerulli Edge—Global Edition • Page 17
While euro-denominated fixed income re-
mained the most popular asset class, ac-
counting for about 30% (€57 billion) of total
Spanish AUM, it was euro-denominated
fixed-income funds offering exposure to a
mixture of debt classes that posted the high-
est growth rate at the end of the third quarter:
234% to nearly €11 billion, according to
CNMV. While still relatively marginal to the
average Spanish portfolio, global equity was
the second fastest growing asset, having
posted a 188% surge rate.
What’s more, neither market is showing
significant signs of home bias, with Northern
European and Northern American fund
houses typically viewed as more experienced
and able to offer a wider range of products
than local ones.
Distributors are keen to have a varied buy-
ing list too, with open architecture acknowl-
edged as the way forward in both markets. In
Spain, more than €29 billion of the €30.6 bil-
lion allocated to funds of funds in the four
years from 2010 to 2014 were “unfettered”.
In Italy, however, the picture is more com-
plex. Banks are expected to move toward
the open-architecture model, to secure extra
(and new) sources of revenues but in the
third quarter of 2014, nearly 75% of funds in-
vested via tied agents’ advice flowed into
products packaged by the companies em-
ploying those agents. Open architecture will
take time. Still, doing business in Italy and
Spain entails being distributed by large net-
works, usually bank-owned, including All-
funds, Fineco, Mediolanum, Santander, La
Caixa, Generali, UniCredit, and Banco Bilbao
Vizcaya Argentaria (BBVA).
In Italy, belonging to a distribution network
costs fund managers between 50% and 80%
of management fees. In Spain, the majority
of managers of active bonds polled by Cerulli
expect to pay up to 40 basis points for third-
party distribution, while active equity can slice
off between 60 and 80 basis points according
to 56% of respondents. It can also be an ar-
duous task; one Cerulli interviewee said it
could take up to two years to complete the
average selection process.
Being part of a network will not inevitably
result in business; an Italian player told
Cerulli that the “best fund in the world” may
get lost in the myriad of offerings, if the man-
ager does not have a proactive sales force to
flag it to the powerful tied agents, ideally via
“training days” or joint road shows.
Sitting on the fence
Another interviewee, speaking for the
Spanish market, said that having Spanish-
speaking representatives operating from of-
fices in loco was essential to doing business
in the country. This is also true of Italy, when
it comes to making inroads with pension
schemes. Italian pension schemes, how-
ever, are very keen fee negotiators and rig-
orous selectors. Above all, a coherent
investment philosophy and sustainable re-
turns win mandates.
Those willing to be pioneers can take ad-
vantage of the newly established route to the
Italian saving community; listing funds on
Borsa Italiana. Since December, funds have
been allowed to apply for listing and those
doing so before November 2015 can claim a
75% discount on the €8,500 admission fee.
To date, only a handful of small to medium-
sized companies are taking steps to list, with
the big players sitting on the fence. This de-
velopment has potential, but it will require
substantial marketing to reach the end in-
vestor, and a big name to list to kick start
0% 10% 20% 30% 40% 50%
Other bond
US equity
MA aggressive
Hedge funds
Other
European equity
Global equity
European bond
Global bond
MA flexible
16%
20%
20%
20%
20%
24%
28%
28%
32%
40%
Northern European and North American fund houses are gener-
ally viewed as more experienced and able to offer a wider range
of products than local counterparts.
Source: Cerulli Associates
Top-10 Fund Strategies that Cross-border
Managers Will Be Promoting the Most in Italy
Over the Next 12 Months, 2015
Note: Survey participants were asked to state the main type of funds that they are
planning to focus on in 2015. They were allowed to choose more than one option.
Italian pension
schemes,
however, are
very keen fee
negotiators
and rigorous
selectors. A
coherent
investment
philosophy and
sustainable
returns win
mandates.
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3. Page 18 • The Cerulli Edge—Global Edition • April 2015
listed mutual funds in a serious fashion. In
Spain, fund listing is a popular topic of con-
versation and speculation, but Cerulli’s inter-
viewees, although potentially in favor, do not
see it as an immediate prospect.
The Spanish and Italian market, similar as
they are, are beginning to diverge on the fi-
nancial advice’s front. Advisors are in de-
mand, but the devil is in the detail. In Italy,
investors, still smarting from the 2001 and
2008 crashes, turn to tied agents for advice.
Independent financial advisors (IFAs) consti-
tute a cottage industry, appealing usually to
high net worth individuals and corporates. In
Spain, however, assets under the steward-
ship of independent advisories grew by 130%
to €134 billion in the four years to 2014.
Cerulli’s interviewees rank retail banks
first in terms of growth potential for 2015 in
Spain, but the second placing of IFAs and re-
tail platforms suggests that a segment of
Spanish investors is expected to look criti-
cally at available products.
Cerulli’s interviewees are not alone in
such a belief. At the end of 2014, online in-
vestment advice service Feelcapital was
launched to target the six million or so savers
investing in funds. For €15 a month, the plat-
form profiles savers’ risk appetite and uses
algorithms to devise portfolios suggestions
accordingly. Subscribers also receive weekly
updates penned in accessible Spanish. In the
four months since its launch, the platform has
signed up about 2,000 subscribers. Founder
and principal shareholder Antonio Banda told
Cerulli that, on average, portfolios are valued
at €60,000 and investors are aged over 50.
Controversial ‘stability law’
Assessing investment opportunities in
these two countries inevitably involves scru-
tinizing the political scene. The financial crisis
unleashed considerable political instability in
Italy. At the time of writing, Matteo Renzi’s
government has been in power for just over
a year, having implemented a controversial
“stability law”, a mixed bag of “carrot and
stick” for Italian investors, including a rise in
withholding tax rates on dividends, interest
and capital gains, although the tax on sover-
eign debt remains unchanged. Pension funds
are being encouraged to invest into the real
economy through a fiscal credit scheme. Ital-
ian politics is notoriously volatile but it seems
Italy’s youngest prime minister does not face
any immediate national challenges.
Political risk plays a stronger role in Spain
this year, with the forthcoming general elec-
tions, which could bring to power the anti-
austerity party Podemos. Cerulli is aware of
some concern about possible tax increases
on investments returns or investment vehi-
cles. Left-wing Podemos seems to riding a
wave of discontent, but its victory is far from
a foregone conclusion given the Spanish
economy is taking a turn for the better.
Success in Italy and Spain, for both politi-
cal parties and fund managers, will depend
on economic recovery among other vari-
ables. Money is flowing into funds, but it’s a
windfall that could revert if bank accounts
offer better rates. It’s up to fund managers to
win the confidence of Italy and Spain’s tenta-
tive investors with widely distributed, trans-
parent products that consistently deliver.
There’s potential for a whole new landscape
in Southern Europe’s crucible.
€1.1
€0.5 €0.4
€0.5
€1.3
€0
€5
€10
€15
€20
€25
€30
€35
Fettered FoFsUnfettered FoFs
20142013201220112010
€14.0
€11.4 €11.0
€14.5
€29.3
Distributors are keen to have a varied buying list, with open
architecture acknowledged as the way forward. In Spain, more
than €29 billion of the €30.6 billion allocated to funds of funds in
the four years to 2014 were “unfettered”.
Sources: Lipper FMI, Cerulli Associates
Spanish Fund-of-Funds Assets Under
Management by Affiliation, 2010–2014
(€ billions)
Note: Excludes funds of hedge funds.
In Spain, assets
under the
stewardship of
independent
advisories grew
by 130% to
€134 billion in
the four years
to 2014.
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