Interview with Giorgio Solcia, Managing Director of CACEIS in Italy.
What is the role of CACEIS Bank, Italy Branch in Italy?
CACEIS Italy branch was established in early 2014. Since then, we have carried out several projects to develop our business, with the support of the Group's operating hubs. Today, we provide Italian clients all of CACEIS's products and solutions in the area of custody and fund administration, UCITS and AIFs.
The Italian market is the second biggest domestic market, after France, for the Crédit Agricole Group. It is also a key market for CACEIS. Thanks to our local presence and market expertise, we have the ability to respond to the needs of investors operating in Italy and to participate in European wide tenders.
In addition to our traditional fund administration activities, we perform a specific function in the Italian market: SIP (Soggetto Incaricato dei Pagamenti).
Indeed, asset management companies that market foreign funds in Italy are subject to the obligation to mandate a local distributor to collect subscriptions in their funds. For operational efficiency and compliance needs with their regulatory and tax obligations, local distribution networks prefer to entrust these activities to a local paying and tax agent, this is the role of the SIP.
CACEIS in Italy is a SIP since 2015 for large asset management companies such as Amundi. We centralise subscription orders from retail investors and transfer them to the fund’s transfer agent. We keep the investor register and prepare reports for local distributors and supervisors. In addition, we calculate and apply taxation on investment capital gains.
Our branch is experiencing significant growth in assets under management and revenues across the entire range of products and services offered: Custodian, Custody, Local Paying Agent, Transfer Agent, Market Solutions.
CACEIS's Italian branch supports Crédit Agricole Group entities, all of whose business lines are now present in Italy. We are a component of Crédit Agricole's Italian ecosystem and a partner of Cariparma, Amundi, Crédit Agricole Vita (the Italian life insurance subsidiary of Crédit Agricole Assurances) and more recently of Indosuez Leonardo.
In 2018, CACEIS Bank in Italy connected directly to the Italian CSD. What are the reasons for this?
Indeed, our branch has become the CACEIS group's local depositary/custodian for the Italian market. CACEIS Bank thus acts as a Direct Connected Participant (DCP) of T2S (TARGET2-Securities) in Italy. By connecting ourselves directly to T2S, we enhance the platform's functionalities in terms of settlement, fund administration and tax services.
As a DCP for the Italian market, CACEIS has added a key market to the list of countries where it already operates directly on the T2S market. The new operating model set up in Italy emphasises the importance of the Italian market to the Group in its development strategy. By centralising custody directly with the local CSD, CACEIS offers additional protection for its clients' assets.
We are currently finalising the clients' portfolios migration process. Our assets under custody have therefore increased substantially, with an overall target of over €70 billion by the end of 2019. These changes have enabled CACEIS to reaffirm and strengthen its asset custody policy and thus enable its clients to benefit from the new model.
How does CACEIS position itself on the Italian fund market?
Since the creation of the Italian entity, we have historically been very close to private equity and real estate fund managers. We have developed a recognised expertise in this area, both as a depositary bank and a fund administrator. Today, for example, we have a leadership position with more than 20% of the market share and even 25% in real estate funds.
In a context of promising market conditions for asset management in Italy, our activity is growing strongly on UCITS funds. We also successfully offer our Market Solutions for Italian clients such as listed derivatives clearing, collateral management and securities lending.
What is your teams' particularity?
Our offices are located in a historic building in the centre of Milan. We share the Palazzo dell’Informazione building with the other entities of Crédit Agricole's Premium Clients division - Crédit Agricole CIB and Indosuez Wealth Management.
We are now 70 employees and particularly proud to respect gender parity, with 54% of women in our teams. The average age is particularly young, around 35 years, and yet we benefit from a quite low turnover rate (4%).
All our staff speak two languages or more. Finally, we are a real Italian melting pot since our teams come from all the regions of Italy, from Lombardia to Sicily.
What are your objectives and how do you intend to achieve them?
Our goals are fully in line with the CACEIS Group's strategy of contributing to innovation in our solutions for clients, the Group's geographical expansion and an excellent relationship with our clients. Our branch contributes to this objective by supporting the Group's clients in their development in Italy and abroad.
Locally, our ambition is to ultimately become one of the top 3 players in the Italian asset servicing market. We look to achieve our goal through business growth and, if necessary, external growth. We are ready to take advantage of any opportunities that may arise in the current environment of concentration of banking providers. We know we can count on the support of CACEIS Group to achieve our ambitions.
In 2019, we particularly want to develop business with pension fund clients, to whom we can offer a full range of services. We have just won a great commercial success with ENPAIA, the Pension Scheme for Italian Farmers, which entrusts us with the safekeeping of its assets.
This success testifies to our ability to support this type of client.