Performance Magazine - issue 29

May 2019

Let’s talk about Italy – Italy is the fourth largest economy in Europe, accounting for 11.2 percent of the total GDP, and the ninth largest economy in the world. It had a gross domestic product amounting to €1,612 billion in 2018. The Italian economic structure – concentrated in the Northern part of the country and composed mainly of small and medium-sized family businesses – relies strongly on services and manufacturing. Notwithstanding, Italy is one of the most indebted countries in the world, with a public debt around 133 percent of its GDP, but it also exhibits one of the highest ratios of private wealth to public debt. So it’s easy to understand why there is one arm of the Italian financial sector that is going from strength to strength, and that’s asset management.

Keeping in mind this macroeconomic picture, we take a step forward, looking at asset management in Italy. Starting in the last months of 2012 through to the end of 2017, the industry has experienced a strong growth.

At the end of 2017, asset management products distributed in Italy exceeded the threshold of €2,000 billion , almost doubling 2012 figures. In recent years, the industry has benefited from the persistence of interest rates slightly above zero or negative, which led investors to seek alternative earnings opportunities rather than traditional securities. For banks, the asset management segment has been an important source of revenue during the years following the financial crisis and played a central role in their growth strategies due to reduced capital absorption compared to traditional banking services.

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