ITALY - State Street Global Advisors and Mediolanum insist that they still have a relationship in Italy, despite State Street’s confirming that it has handed over its share of Italian pension fund assets to Banca Esperia.

Esperia is a private bank established by Mediolanum and Mediobanca, or Due Emme, in July 2000.

The venture, Mediolanum State Street, had been viewed as highly successful but last October the two entities were rumoured to be parting company.

SSGA says, however, that the joint venture is still in existence. Says Erich Stock, managing director of Mediolanum State Street: "The joint_venture did not finish. It continues to exist and manages the first Italian private equity fund of funds, Fondamenta with over 162 million euros of commitments."

A spokesman at Mediolanum confirmed that there was still a relationship between the two parties.

The relationship, however, is not quite what it was initially. SSGA, through Mediolanum, had become one of the three leaders in the fledgling Italian pension market, having won the lion's share of the new generation defined contribution pension fund mandates.

Together, the joint venture managed mandates for pension funds Cooperlavoro, Foncer, Fonchim, Fondartigiani, Fondenergia, Fopen and Previambente.

Now, says Stock: "All these mandates have been transferred to Banca Esperia." Although of the funds contacted, Cooperlavoro says it has since replaced Banca Esperia as an asset manager.

"In one case, Fonchim, SSGA manages the fund under a sub-advisory agreement to Banca Esperia," adds Stock.

Andrea Girardelli, director at Fonchim, confirmed to IPE that SSGA was still effectively managing the assets: “When we first went to tender we took into account the track record of State Street not the track record of Mediolanum.”

Girardelli says he is unsure of what happened between State Street and Mediolanum but agreed to give the mandates to Mediolanum and Mediobanca’s venture Due Emme provided that they outsourced the mandate to State Street and Fonchim did not have to pay any more in fees. “We can’t just change fund manager like that!” added Girardelli.

Why SSGA removed itself from the management of Italian pension fund assets with Mediolanum is unclear. The latter declined to comment further, and the former was unavailable for comment on the reasoning.

On their reformed relationship, Stock says: “We still have the joint venture for the management of Fondamenta and manage around four billion euros in various funds under a subadvisory agreement for Mediolanum,” and Stock insists that Italy continues to be an important market for SSGA. “We are currently evaluating the opportunities in the region and our strategy going forward,” he says.


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