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 profitability, 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 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 entrusted to Fondaco Sgr, in whose organisation other foundations of banking origin also participate.
The portfolio’s structure
At the end of 2016, the total market value of the financial assets portfolio held by Compagnia di San Paolo amounted to € 6.8 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 2011-2016 (€/billion)
Regarding portfolio composition, on 31/12/2016 shareholding in Intesa Sanpaolo amounted to approximately 52,9% (considering both the shares held directly and those in management) of total financial assets, down from 59,7% 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 39,6% of the total.
The remaining 7.5% completed allocations, represented by the mission related investment portfolio, liquid assets and other shareholdings and activities.
From the risk/yield angle, again in 2016 the component invested in funds efficiently carried out its task of reducing the portfolio’s total volatility: in the face of volatility approaching 51% of the investment in Intesa Sanpaolo (33% in 2015), the diversified portfolio has kept an overall volatility of 2,4% (reduced from 5% in 2015), 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 26,7%.
Portfolio’s risk/yield profile in 2016
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 2016
Again in 2016 the global economy continued to expand moderately. At the end of the year the European index Euro Stoxx 600 showed a -1,2% price variation and the S&P500 ended the year up 9,5%. The European financial sector – and, in particular, the banking sector – after a very negative first semester, recovered during the second part of the year, closing with a negative variation of -6,8%.
Concerning Compagnia’s portfolio, the shareholding in Intesa Sanpaolo confirmed profitability in terms of dividends, distributing € 163 million in net dividends to Compagnia (dividend yield of +6,3% - dividend on average 2016 stock price), against a total return of -16,4%, due to negative performance of the shares on the market (-21,4% against -6,8% 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 negative (total return market value approximately -9% circa) solely due to the performance of the transferee’s shares.