Generali to push into asset management

Generali has unveiled an ambitious push into asset management, with a new plan to more than triple the profits it makes from the business. The move comes despite tough conditions in the asset management world.

Generali, which earlier this year saw off takeover interest from Intesa Sanpaolo, plans to increase its assets under management by just over a tenth to EUR500 billion. It is also aiming to improve its asset management profits from EUR84 million last year to EUR300 million by 2020.

“The industry is challenged and there is disruption going on,” said Tim Ryan, Generali chief investment officer. “You need scale, which we have. The problems are for small and medium-sized asset managers, who can’t absorb the costs.”

Generali hopes to increase its profits by managing more of its own assets in-house (rather than having them managed by rivals), winning new business and improving efficiency, according to a report in the Financial Times. Ryan said the cost to income ratio would fall from 71 percent to 55 percent by 2020.

The company plans to become a specialist in so-called “real assets” such as infrastructure debt, real estate and private equity where competition from the passive managers is less intense.  It also plans to manage more money for other insurance companies, especially smaller ones. “