Luca Trabattoni: «The Bank Can Still Gain More Market Share in Italy»

Since the turnaround in interest rates, new, interest-sensitive investment products have been in demand in asset management. This is also the case in Italy, one of the largest investment markets in Europe. UBP's Luca Trabattoni sees enormous growth opportunities there, thanks to artificial intelligence and many years of expertise, as he explains in an interview with finews.com.

Luca Trabattoni, you are responsible for the asset management business of Union Bancaire Privée (UBP) in Italy. How would you describe this market?

Italy is a special case. The government's debt is enormous, while at the same time, private individuals and companies have enormous wealth. So, depending on how you look at it, the country is either poor or very rich. For the asset management industry, the latter is true. However, the market is highly regulated.

What does that mean?

We cannot address private clients directly; we must go through local Italian banks that offer our products. In this respect, the asset management industry in Italy is mainly a huge distribution business with many national champions.

«Branding is very important if you want to stand out in the Italian market»

However, all the big foreign asset managers have been present in the country for about 30 years. Branding is even more important if you want to stand in die Italian market.

How does UBP position itself in this context?

UBP has a local presence with its Asset Management division and since 2012 we have been a branch of UBP’s Luxembourg subsidiary, Union Bancaire Privée (Europe). To position ourselves differently from our competitors we have focused on providing our clients with a top-quality service.

This means, for example, organizing regular events involving UBP experts that are sometimes supported by external national experts in different fields covering economic or geopolitical topics.

«We work with various institutional clients in Ticino»

That has allowed us to be seen as a provider of diversified out-of-the-box innovative solutions in both traditional and alternative asset classes.

Which client segments do you cover?

All of them, i.e. retail clients via local financial institutions as well as private banks and institutional clients such as pension funds, insurance companies and other pension providers, but also family offices and independent asset managers.

Is there any cooperation between UBP Asset Management in Italy and the bank's branch in Lugano, Switzerland?

Basically not, since in Lugano the bank serves wealthy clients in Private Banking. However, we work with various institutional clients in Ticino who appreciate the cultural proximity, especially the shared language.

How do Italian and Swiss institutional clients differ?

Both Italian and Swiss institutional clients appreciate the accuracy of the service and the support provided by the different asset managers and they like to have direct access to the portfolio manager. Performance and a consistent and robust investment process are also very important.

This means that they are open to new ideas, to read external research, and to meet portfolio managers. Where they differ is that Italian ones are obliged to be more formalistic as they must comply with many more internal directives and constraints, and regulatory requirements.

«The Italian investment landscape has undergone a complete shift»

That's why they are less flexible than Swiss clients when it comes to investment products, especially if they are new or niche. Swiss institutional clients use more new strategies, alternative instruments, and private market solutions.

Are there specific Italian investment products?

The Italian investment landscape has undergone a complete shift as interest rates have risen and Italian government bonds now yield much more than they did 12 months ago. This has required a re-assessment as ordinary products that were in vogue during the last decade or so have now lost some of their appeal.

What are the consequences?

This new regime needs to be kept in mind while offering tailor-made products to Italian clients, as the competitive background has drastically changed over a short period, requiring an adjustment from asset management companies when they design products for a specific country.

What trends do you see in Italian asset management?

Private market investments are growing fast and are gradually finding favor with institutional investors such as pension funds and insurance companies. Sustainable investments are also in focus but now with less appetite, although I find that there is a lot of talk about them, but not many investments. Perhaps it will take more time before they are accepted on a large scale.

«Sustainable investments are a niche market for the time being»

Moreover, performance in the past years was not optimal due to numerous developments such as inflation, geopolitical conflicts, and the threat of recession. All this has led to a certain caution among investors. Sustainable investments are a niche market for the time being.

Artificial intelligence (AI) has become a buzzword in the financial sector as well. How do you approach this topic?

On the one hand, we invest in companies that benefit from the use of AI themselves, i.e. where it is part of their business model. On the other hand, we are examining across the UBP group how we can use this technology to become more agile.

What are your growth plans?

We are very keen to diversify further, both in terms of our clientele and our offering. We already cover many investment segments, but we can become even more innovative to serve our clients even more comprehensively. This also reduces possible dependencies and gives us a broader base.

«It is really important to be agile here»

It is also important for us to be able to react quickly to new developments and implement them within our range of products and services, as we did, for example, when the interest rate trend reversed. It is indeed important to be agile here. Against this background, we are convinced that we can expand our market share in the Italian market.

Luca Trabattoni, a Swiss, joined Union Bancaire Privée (UBP) in 2011 as Head of Sales for Italy and the Mediterranean countries, working out of Milan. Before that, he worked for ten years as Senior Sales Manager for Italy at Pictet. Previous positions include Relationship Manager at J.P. Morgan Asset Management and Head of Marketing and Sales of Real Estate Funds at BNP Paribas BNL Fondi Immobiliari. He holds a degree in Business Administration and Economics with a specialization in Business and Management. He is registered in the National Register of Financial Advisors of Consob, the Italian stock exchange regulator. In Milan, UBP employs a total of seven people and manages around 1.5 billion euros in client assets.