The strategic lines of the management of financial assets
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 profitability, ensuring the functional connection with their institutional goals and in particular with the development of the territory. Strategic Asset Allocation is defined with the contribution of an independent financial advisor.
The adopted model is reflected in the organisation of the investment process, in which 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 currently achieved through investment instruments managed by the participated company Fondaco SGR.
The portfolio’s structure
At the end of 2017, the total market value of the financial assets portfolio held by Compagnia di San Paolo amounted to € 7.3 billion.
The market value of Compagnia’s portfolio over the last years has been conditioned by the performance of Intesa Sanpaolo shares, which peaked in 2015.
Total gross financial assets 2012-2017 (€/billion)
Regarding portfolio composition, on 31/12/2017 shareholding in Intesa Sanpaolo amounted to approximately 45.9% (considering both the shares held directly and those in management) of total financial assets, down from 52.9% 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 about 44.5% of the total. The remaining 9.6% completed allocations, represented by the mission related investment portfolio, liquid assets and other shareholdings and activities.
From the risk/yield angle, again in 2017 the component invested in funds efficiently carried out its task of reducing the portfolio’s total volatility: in the face of volatility approaching 20% of the investment in Intesa Sanpaolo (51% in 2016), the diversified portfolio has kept an overall volatility of 2.2% (in line with the previous year), 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 10.2%.
Portfolio’s risk/yield profile in 2017
Portafoglio totale: Overall Portfolio
Fondi Azionari: Equity Funds
Fondi Alternatives (con PE): Alternatives Funds (with PE)
Portafoglio Diversificato: Diversified Portfolio
Fixed Income Funds (Gov)
Fondi Alternatives (ex PE): Alternatives Funds (ex PE)
Rendimento TW 2015 Gross: TW 2015 Gross Return
Volatilità Annualizzata: Annualised Volatility
The results of 2017
2017 was a positive year for the global economy: world GDP levelled out at +3.7%. At the end of the year the European index Euro Stoxx 600 showed a +7.7 % price variation and the S&P500 ended the year up +19.4%. The European financial sector – and, in particular, the banking sector – after a very positive first semester, practically cancelled earnings in the third quarter, going on to recover during the last part of the year, closing with a positive variation of +8.1%.
Concerning Compagnia’s portfolio, the shareholding in Intesa Sanpaolo confirmed profitability in terms of dividends, distributing € 210 million in net dividends to Compagnia (dividend yield of +6.7% - dividend on average 2017 stock price), against a total return of +21.8%, due to positive performance of the shares on the market (+14.2% against 8.1% recorded in that year by Euro Stoxx 600 Banks).
The diversified portfolio invested in funds managed by Fondaco Sgr had a net yield of +2.2%.
The total final yield of Compagnia’s portfolio was positive (total return market value approximately +12 % circa) above all thanks to the performance of the Transferee’s shares.