Three Italian foundations have set up their own asset management company tailor-made in order to ‘build an investment platform which fully understands foundations’. Ninety per cent of what we do is for foundations, explains Luca Vaiani, Chairperson of Fondaco Lux. This means aligning the new company with foundations in terms of transparency, governance and fee structure and understanding exactly what they need. ‘Foundations are both our shareholders and our subscribers,’ says Vaiani.

Based in Luxembourg, Fondaco Lux SA began operations in March 2008. Its founder is the Italian company Fondaco SGR, which is owned by Compagnia di San Paolo, Fondazione Cassa di Risparmio di Padova e Rovigo and Fondazione Cassa di Risparmio di Bologna. Together they own 80 per cent of Fondaco SGR, which in turn owns Fondaco Lux. The Turin-based Ersel Finanziaria, an independent asset management company, owns the remainder of Fondaco SGR.

Fondaco Lux is intended to benefit investors who feel there is a lack of transparency from managers, or who wish to reduce the cost of market access, or to construct tailor-made or innovative solutions. ‘Too often,’ says Luca Vaiani, ‘investors who subscribe to a fund are selling to the investment manager a free option to control activities surrounding the investment.’ Fondaco Lux, by contrast, will leave strategic decisions (asset allocation, manager selection, etc) in the hands of investors and their advisers. The cost advantages of pooling assets are obvious, particularly when investors share the same manager, and there are the additional benefits of operating in a regulated and fiscally efficient environment.

New investors may also take a stake in the company, and knowledge-sharing between investors is encouraged. The company’s governance is also structured so as to try to provide a fair profit for all stakeholders, not just the shareholders.

The company currently manages six sub-funds totalling €1.7 billion, which are ‘UCITS III-compliant’ (UCITS III are European Union Directives which allow collective investment schemes to operate across the EU on the basis of authorization from one Member State), all managed by external managers chosen by the investors. Other initiatives in traditional and alternative asset classes are expected to be active soon.

For more information
Contact Luca Vaiani at luca.vaiani@fondacosgr.it