Furio Pietribiasi of Mediolanum International Funds
Mediolanum’s Furio Pietribiasi talks to Kathleen Gallagher about the benefits of boutiques
Furio Pietribiasi, CEO of Mediolanum International Funds, is a strong believer in the benefits of investing with boutiques. His firm has established a goal to have one-third of the assets in its multi-manager portfolios invested in boutiques, over double the current 15%, in the next five years.
"The mindset is more entrepreneurial," the Dublin-based CEO explained of boutiques. "They [boutiques] look at the long term…so they are not looking and thinking based on the AUM of the quarter." Because of this mentality, Pietribiasi said Mediolanum tends to find an "immediate alignment of interest," which is not the same as with the larger asset managers.
The CEO added that as the average AUM of the largest asset managers has grown, their ability to give "high touch services" to clients is limited and client "relevance tends to be lower", even for firms such as Mediolanum which has around €40bn in assets under management.
A substantial part of this AUM growth has been driven by consolidation within the industry. According to recent research by Willis Towers Watson's Thinking Ahead Institute, out of the 500 names that featured in its Pensions & Investments 500 list ten years ago, 221 were absent in 2021, demonstrating a "quickening pace of competition, consolidation and rebranding".
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While larger firms are overwhelmed by their number of strategies and clients, with boutiques, Pietribiasi sees two key advantages: a clear focus on the limited number of strategies and Mediolanum's value to them as a client.
He said the relationships with the boutiques were "a real partnership" and the firm gives the boutiques insight, advice and support. This includes access to Mediolanum's media partners and service providers.
Beyond all this alignment of interest, however, is a focus on performance and a belief that boutiques do perform better than their larger peers.
Studies back this belief up. A paper from Cass Business School (now Bayes Business School) last year found that overall, boutique funds outperformed funds managed by large asset managers by just over 0.8% per annum on average.
Similarly, research from the Affiliated Managers Group found that boutiques significantly outperformed non-boutiques in nine out of 11 equity product categories, by an average annual 51 basis points.
When asked why he is targeting one-third of assets and not a larger figure, the CEO said it was due to the capacity constraints given the size of their multi-manager range and because of the amount of work it takes to find good boutiques.
"And having said that," he added, "we do believe there are still great strategies run by the larger asset managers. We see the two worlds complementing each other. But I am not excluding that over time, and once we have achieved our objective, that the boutiques element will grow even further."
Dearth of boutiques?
Despite recent figures and reports suggesting the UK asset management market has higher barriers of entry for boutiques, Pietribiasi thinks the recent wave of consolidation may actually lend itself to increased numbers.
A Freedom of Information request submitted by Investment Week to the Financial Conduct Authority earlier this year showed there were 97 newly-authorised asset management firms last year, while in 2016 there were 221.
However, for Pietribiasi, this figure does not reflect the future environment.
Following the substantial number of large scale mergers and acquisitions, there are teams that do not find themselves good fits for the new combined organisation, according to the CEO.
A combination of the size, complexity and the inevitable cultural shift means an entrepreneurial team or fund manager may look to set up their own shop.
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One of the multi-managers
Along with a strategic focus on boutiques, Mediolanum is also transforming its strategies so that one-third of the assets will eventually be run by an in-house management team.
The CEO said over time, the fund management company has evolved and now wants to be "one of the multi-managers within their strategy". In other words, it wants to have its own investing teams and funds.
"We have been developing and investing resources and money into new teams. Fixed income first and then equity and now a quant team," he said.
Currently, just over 10% of AUM is invested in in-house funds.
However, Pietribiasi stressed that Mediolanum never believes it will be the only manager within their solutions, as their philosophy is in the value of having multiple managers.
