The strategic lines of asset management
The Compagnia di San Paolo adopts a “diversified asset management” policy, which is typically inspired by the institutional investor model and by the principle of law according to which foundations must diversify their assets’ investment risk and use them to get an adequate earnings performance, ensuring the functional connection with their institutional goals and in particular with the development of the territory.
In this perspective, the Compagnia’s investment policy combines its tradition and regulatory cornerstones with the independent contribution from the advisors and the professional competence of the Fondaco SGR asset management, which in turn selects international managers with the purpose of drawing the utmost benefit from long-term investments and achieving goals of prime importance in managing the assets. Among these goals are the preservation of the assets’ real value and, possibly, their growth for future generations; the stabilisation in time of the level of resources destined to institutional interventions, in proportion to the real value of the assets; an efficient contribution aimed at favouring a balanced development in the territories of reference. The Compagnia considers this approach, which favours asset management tools, as being less risky than the “direct participation holding” model, as it offers more diversification (with respect to the type of tools, sector, style, geography, etc.) and the prospect of earnings which will tend to be more stable in time.
The adopted model is reflected in the organisation of the investment process, in which the Compagnia keeps the direct management of the strategic and non-strategic participations and the mission-related investment portfolio, while the management of the diversified portfolio is totally entrusted to Fondaco Sgr, in whose organisation other foundations of banking origin also participate.
The portfolio’s structure
At the end of 2015, the total market value of the financial assets portfolio held by Compagnia di San Paolo amounted to € 7.7 billion, with a 15 % growth compared to the €6.7 billion resulting from the closing of the 2014 financial year.
In 2015 Compagnia’s portfolio grew noticeably, confirming a tendency inversion that started in2012 , after quite a negative phase for the Compagnia and for the whole system of banking foundations.
The market value of Compagnia’s portfolio moved from € 6.9 billion in 2009 to about 5.1 billion at the end of 2011, and then grew slightly in 2012, (see graph) and more markedly in the last three years.
Total gross financial assets 2009-2015 (€/billion)
Regarding portfolio composition, on 31/12/2015 shareholding in Intesa Sanpaolo amounted to approximately 59.7% (considering both the shares held directly and those in management) of total financial assets, up from 54.3 % the previous year. The "diversified" part of the overall portfolio, represented by the investment in mutual funds managed by Fondaco SGR S.p.A., made up 34.7% of the total; the remaining 5.6% completed allocations, represented by the mission related investment portfolio, liquid assets and other shareholdings and activities.
From the risk/yield angle, again in 2015 the component invested in funds efficiently carried out its task of reducing the portfolio’s total volatility, also thanks to the progressive settling-down of this indicator for almost all of the asset classes: in the face of a volatility higher than 33% of the investment in Intesa Sanpaolo ( 32 % in 2014), the managed portfolio has kept an overall volatility of 5% (an increase of 2.7% in comparison with 2014), with a differentiated profile for the different activity classes, as shown below.
The combined effect of the different investments has lead the portfolio’s overall volatility (excluding the mission related investments funds) back to a value of 18% broadly unchanged in comparison with2014.
Portfolio’s risk/yield profile in 2015
The results of 2015
In 2015 the global economy grew by 3.1%, notwithstanding the new slowdown of Chinese economy and the marginal contribution of European economy.
The European index Euro Stoxx 600 showed at the end of the year a +6.8% price variation and the S&P500 ended the year down 0.7% . The European financial sector – and, in particular, the banking sector – ended the year with a negative variation of -3.3 %.
Concerning the Compagnia’s portfolio, thanks to the joint effect of the two components – share appreciation and dividends - the shareholding in Intesa Sanpaolo registered a 30.25% total return. The diversified portfolio invested in funds managed by Fondaco Sgr showed a +3.1% gross return.
The total returns of the portfolio according to market value is at the remarkably positive level of +18.4%.