Assicurazioni Generali SpA’s asset management unit intends to buy investment firms specialized in U.S. credit markets and renewable energy, as the Italian insurance giant seeks to win outside money beyond its traditional base.
“We are seeking to boost our investment capabilities through the acquisition of controlling stakes in small and medium-sized companies with expertise on these segments,” Carlo Trabattoni, chief executive of Generali’s asset and wealth management activities, said in an interview in Milan. “We are in talks with several investment firms” focused on those areas, he said.
While the asset-management arm Generali Investments generates less than 12% of the group’s profits, expansion in the area is one of the pillars of the company’s strategy under Chief Executive Officer Philippe Donnet. Since 2017 Generali has bought investment boutiques including France’s Sycomore Asset Management to boost offering of environmental and socially-responsible funds, and the London-based alternative asset management unit of Bank of America, Lumyna.
Now, Trabattoni, 63, is looking at purchases of firms with as much as 70 billion euros ($75 billion) of assets under management. “Our possible targets on credit should be based in the U.S.; for renewable energies there isn’t any precondition on where they are located,” he said.
“When I joined Generali almost the entire amount of assets under management were from clients of the insurer, so one of my goals was to add assets from third parties,” said Trabattoni. The adopted strategy was to build up a multi-boutique platform to attract new clients and provide customers a wider range of products, leveraging the expertise of firms that Generali bought.
The insurer is looking to invest as much as 3 billion euros in acquisitions in non-life insurance activities and asset management businesses in the period through 2024, Donnet said in December.
Generali Investments managed about 575 billion euros at the end of 2021. It operates through 1,200 asset managers and specialists in more than 15 countries. The unit has added more than 100 billion euros of assets from third parties in the last 3 years. Generali is seeking to generate 200 million euros of additional revenue from its money-management operations under the oversight of Trabattoni, from the 1.1 billion euros posted in 2021. It reiterates its revenue annual growth target of more than 7% for the unit through the plan period.
“About half of the targeted additional revenue is expected from non-captive clients,” Trabattoni said.
New Openings
Key pillars for organic growth of the asset management unit in the next 3 years are the expansion of distribution to reach new countries, the strengthening of real assets, which include alternative asset management investments such as real estate and global infrastructure, and digital investments.
Generali is seeking to build up its own distribution network to serve institutional clients, funds and financial institutions by opening new sale offices and hiring staff in Switzerland, Asia and the UK. “We are opening an office in Zurich, where we plan to hire five salespeople by 2024,” said Trabattoni. “At the beginning of next year we are planning to open a office in London and by end of next year one in Singapore.”
Key segments for organic growth will be the real assets, private debt and direct lending, said Trabattoni. “Real assets have a central role as a source of uncorrelated returns for investors, and we aim to develop the business in UK and Asia.”
Last year, operating profit in asset management rose 22.9% to 672 million euros, driven by the increase in assets under management, the strong performance of financial markets and the growth in revenue from the companies which are part of the multi-boutique platform.
Trabattoni also oversees the wealth management division, which includes Banca Generali, a private bank listed in Milan which is controlled by the insurer through a 50.1% stake.
“Banca Generali is strategic for the group and we are very satisfied with its results,” Trabattoni said, in response a question about a possible sale of the unit.
Photograph: The headquarters of Assicurazioni Generali SpA in Rome, Italy. Photo credit: Alessia Pierdomenico/Bloomberg
Topics USA
Was this article valuable?
Here are more articles you may enjoy.
Hartford Q1 Income Up 41% on Commercial Lines as Auto Results Improve 
Ban on Worker Noncompetes Faces Uphill Legal Battle 
Growing Wildfire Risk Leaves States Grappling With How to Keep Insurers From Fleeing 
Investors Are Increasingly Interested in a Novel Type of Weather Insurance 
