Anima Holding SpA (ANIM) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Anima Holding Full Year 2019 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Marco Carreri, CEO of Anima Holding. Please go ahead, sir.

Hello, everybody, and thank you for attending to our conference call, presenting 2019 full year results. Let me start this over from some highlights in Page 4. As always, from commercials, we have AUM up 7% or EUR 185 billion in total. Strong contribution of our performance effect and good recovery in the second half of the year in term of the flows that permitted to close that, excluding Class I in positive round the net new money attracted in -- during the year. Concerning our mix core revenues improvement continue with net commissions [Audio Gap] and we closed 2% up on year. Recurrent EBITDA margin with -- excluding performance fees, it's well above the guidance equal to the EBITDA margin to 12.7 basis points. If we move to Page 5, we have the split of our business by segment and with retail representing around 30% of total AUM, and in absolute term, EUR 55 billion to be compared with EUR 53.7 billion at year-end 2018. No particular changes in term of the split between different distributors with strategic partners representing around 87.6% of total AUM followed by other banks, slightly lower than 8%; and FAs, financial adviser, over 4%. Moving to the right side of the page, Institutionals, representing around EUR 130 billion, up from EUR 119 billion at year-end last 2018. Let me say that Class I insurance, so considering the Poste the Class I insurance and the other class insurance represent around 69% of total AUM, with a strong increase driven by market effect year-on-year. Then we have insurance/Unit Linked, so other than Poste, representing around 6.2%. And then Poste funds plus -- Unit Linked and Poste, 5.7%. If we move to the next page, Page 6, we are happy to discuss about the AUM evolution. You can see that net new money is represented around EUR 340 million of net new money with the [ school ] more than fully registering the institutional component which, as you know, we also include the Unit Linked component that is basically a B2B2C business like [ mutual funds ]. While the 2 retail is negative for around 2.3 -- EUR 2,380,000,000 even if with a good recovery in the second half after the first half. If we look at the market effect, we split into 2 parts in order to give you more color about the distribution of this market effect as we -- as you can see is where we distributed between institutional, EUR 3.2 billion; and retail, approximately EUR 3.7 billion. Last but not least, the Class I mandate that we usually represent as AUM change, we gave you more color about the distribution that is represented by market effect and the so-called net new money. The market effect is positive for around EUR 8.7 billion, while the net new money is negative for 3.3 -- more than EUR 3.3 billion. Let me explain why we presented it this way because basically, these negative flows are fully related to adjusting the asset allocation of our main insurance partner so are completely are related to commercial dynamics. In the last 2, 3 months, the main distributor, the main insurance partner, represented a strong outflow for modification in the asset allocation. If we move to Page 7, we have the investment performance. As you can see, we registered a strong performance in absolute term, above 8.5% but also relative, thanks to a very good last quarter in which we significantly outperformed the industry that we -- is in the region of 7.9% on year basis. I think now it's time to move to the financial analysis. And so I give the floor to our General Manager, Alessandro Melzi.

Thank you, Marco. Hi, everybody. I would move to Page 9 for the results -- the consolidated results for 2019. I will start from net income, plus 19%, up to almost EUR 146 million for the year. This result is made by total revenues, up 11% to EUR 358 million approximately for the year. And this will give you the result of also strongly related with an increase in performance fees. Total expenses is a bit down to EUR 80 million, almost EUR 81 million for decrease mainly due to other expenses. EBITDA, up plus 15% compared to 2018, almost EUR 278 million. Looking on the right side of the page and the profitability. We highlight that the average margin are more -- are in line with our guidance provided in 2019 and fully reflect the impact of institutional volumes. Just to remind you that in 2019, we closed the large deal with Poste Italiane with the -- including our perimeter of almost EUR 80 billion of assets coming from the Class I insurance business. On the cost side, the cost-to-income is demonstrating our strong capability to keep absolutely under control our cost base and to fully start our operating leverage. If you look at the cost/income and total revenues, it's 22.5%, excluding performance fees, 26%. The financial charges, the increase in financial charges, then we'll get back to it, mainly due to the refinancing deal we closed in October. And the tax rate, just to remind you that is we -- is improving a positive effect of one-off tax relief that will come more or less for EUR 6 million on net income. Page 10, revenue margin in line with the upper part of the guidance we provided in 2018. We have -- as a result of cost -- strong control on cost of revenues, we have our EBITDA above our guidance and with a very high margin, indeed very high in terms of margins, almost 74%. And on top of the margin, we are showing a year of [ contract ] performances. Page 11, net fees. We have -- we said it more than once during the year. In 2019, we had lower performance fees due to less or to a slower turnover in Lufthansa. But this was offset -- more than offset by AUM and product mix. In Q4, we reached the highest result in terms of the quarter in terms of net commission by quarters. Looking on the right side of the page and the cost. Personnel expenses, the fixed component declining. This is due to a lower headcount coming from the exploit of the synergies of the acquisitions made during 2017 and '18. Variable compensation increasing because of better performance fees and that overall financial performance. Just to -- let's say, a quick comment on the variable related to performance fees. Performance fees this year were attached mostly on traction and competitive products, where we have a lower contribution of PM in terms of management of these buffers and so a lower concession of our variable compensation. Page 12, cost efficiency again with the decrease on a like-for-like basis, the -- of the cost base in 2019 compared to 2018 is in the region of 6%. The OpEx reduction came mostly from outsourcing, rent, utilities, info providers, et cetera. As I mentioned before, fully exploiting the integration of the assets we bought in last years. The guidance we provided at the time for the acquisition -- for the Aletti acquisition was in the region of EUR 5 million of cost synergies. Then we reviewed the guidance at EUR 7 million, we can account today that we can say today that we stay at least at EUR 7.5 million of synergies related to the acquisition. Page 13. Getting back to our capability to generate cash and to have a sustainable and very high EBITDA. We realized in the past that, thanks to the operating leverage, we'll be able to offset margin pressure growing in our volume in the last -- in these years. This table shows our EBITDA performance fees and the total EBITDA and also the movement of EBITDA by quarter. This is net of performance fees, of course, showing clear and solid path but only partially influenced by the quarterly volatility that we often have. Page 14. You'll find in our accounting reduction in terms of cost related to the long-term incentive plan approved in 2019. This is mainly due to the fact that we, according to IFRS to review the value of the LTIP account in the financial statement. This is related to the likelihood of the full achievement of the KPIs. Page 15. Again, as I showed before, the interest expenses. We -- as you may remind, in October, we refinanced entirely our debt position, issuing a bond and refinancing of our bank debt position with a new pool of banks, as subset over the yield of the pool. This implied a reversal of the upfront fees paid from the old new debts or the old debt structure. This is a noncash and one-off item of EUR 4 million approximately. And then we have to unwind the hedging on the old debt structure for approximately EUR 2.5 million. Page 16, the net debt position. Just to remind you that the gross debt is entirely at the old level, and the 2019 net financial position was influenced by EUR 61 million of shares buyback, EUR 61 million of net dividend paid to shareholders at the opening, EUR 50 million of repayment of the bank loan in June before the refinancing and EUR 7 million for the tax release I mentioned on the first month. Last, Page 17, we wanted to highlight the high return provided to shareholders in these years by our company. The dividend was always kept at least at 50% of reported net income in line with the guidance provided at the time of the IPO. This notwithstanding the releverage here for M&A 2017, 2018. In 2019, in particular, ANIMA returned more than EUR 122 million to shareholders. This was made by dividends EUR 61 million as I mentioned for a buy bank of about EUR 61 million, corresponding to an average yield of 9% of our market cap. I give back the floor to Marco.

Yes. Thank you, Alessandro. So we are going to Page 19 with some closing remarks, starting with some consideration about the 2019 year that was, in my opinion, a two-sided year with a tough first half and a much better second half with good recovery flows but mainly a robust improvement in the economics continues once again, our capability to adapt and grow, also thanks to a well-diversified business model. Saying that and looking forward, let me say, the year 2020 started well, and I can see that scenario keeps being favorable for the company acting in the asset management landscape. The clear and the real challenge is how to move the usual pool of liquidity lined on current accounts. It is a challenge for us and for the banking distributor. Of course, we see some macro scenario. We believe that the scenario is benign, in particular, the political scenario, mainly related to U.S. political elections and growth environment potentially impacted by the so-called COVID-19 virus. Clearly 2 parts to grow. We are acting on different areas. The main development areas for us at the following: First of all, we are going to strengthen the investment process, investment abilities as we can see later on. We are enlarging the so-called traditional product offering. And last but not least, we are entering the product market landscape. If we move to Page 20, we have -- allow me to give you more color about the different initiatives that I just mentioned, starting with the investment management announcement, in particular, the internal research team that we consider very important for our announcing our investment management process and to support the asset management capabilities. The head of the team has been just hired. He comes from a market with a very strong experience in macroeconomic research. We are also investing in the so-called artificial intelligence project, creating the team of -- based on the first stage of 3, 4 people to support asset management activities but also to develop some new quantitative methodologies that we consider that could represent a good weapon in the coming future. Also in this area, the head of the team is just hired in the team 2, 3 months ago. Moving to the product development, in particular in the so-called traditional area. We are clearly revisiting the PIR 3, what we call the 3.0. I mean after the new modification of the law. We started the commercial activity. Let me say that many distributor had to set up a new procedure before start promoting the new products, so we expect to close in the coming months. ESG implementation, 2 areas of development. First of all, we are including the so-called ESG criteria in the investment process on all our product offering in collective and [ EU ] mandates. And in particular, we are developing -- we developed a specific industry product range covering different asset classes and in fixed income, balance and equity funds. Last but not least, PicPac, that is the name of some targeted fund which we are going to, in some ways, to create a dollar cost of averaging method in the mode of funds so increasing the equity component with the concept of timing diversification in order to reduce the volatility and encouraging the customer to, in some ways, to invest in more funds with an increased equity exposure compared to the past. And then we have the alternative product offering. We are going to establish a newco in the so-called alternative asset management company. As you can see, the company in the Page 21 will be held -- fully held by ANIMA Holding, the new company. We just had 2 very highly reputed senior portfolio managers, starting with ideas to start moving in the area of this private debt in general. I mean as LBO, mini-bonds, direct lending, everything that will be included in the first fund. That is expected to be launched in the first -- in the third quarter this year after the approval of this new vehicle. Clearly, our presence in this area will be something that we should consider very important in order to enlarge the product offering, considering also the low rate scenario that we have to see also in the coming future. It will permit to us to offer product with most -- more interesting [ testament ] or -- and yes, it would be best to find the product range, having in mind the target of customer impact in institution but also the so-called high net worth -- our high net worth individual segment. I think that I have -- we understand we have concluded the presentation. But before moving to Q&A section, let me spend a few words on something you probably have read in today's press release, I mean, referencing to my decision not to seek another mandate as CEO. First of all, let me say that leading ANIMA was for me a great privilege that I live with passion, commitment and great sense of responsibility towards all stakeholders. And with the fact that this adds to the responsibility, leading me today to take a step back. I feel that it's both necessary, the strong motivation that since the first day led all my decisions and made me ask to myself, but also to the people working with me, to carry on all initiatives with this targeted ammunition, ride each single day the model ambitions well. Those motivations would not be the same in the future. I'm 58 years old and I feel the need to redesign at least partially the priorities of my life, looking with curiosity and new challenges that life, not necessarily professional life, will make me as a gift. I have taken this decision with the certainty to have led a solid and healthy group, as highlighted by the results we just disclosed, a group with a strong focus on values, among which an outstanding management team of absolute quality, cohesiveness and determined to carry on the success story we wrote together. I also worked so that this team, starting from our general manager, Alessandro Melzi, will grow up so will be ready one day to take over my role. The rank into our group of the managerial continuity that I believe is a great value to preserve and further announce. I trust that this will be taken into account, but when the time to identify Melzi's successor will come. I close these remarks. So thank you all of you for the time and the passion you devoted to our group and to me in particular. Having said that, I believe that we can start with Q&A with the foreword that the aforementioned topic, I would consider not to have to further comment. Thank you all, and then we are available for your questions.

[Operator Instructions] The first question is from Domenico Santoro with HSBC.

First of all, of course, we are sorry to see you go. Just a number of questions from my side. First of all, this was quite a busy week in the banking sector. It was a surprise move from one operator, so I'm just wondering which kind of opportunities ANIMA might take in this environment, given the strategic partners -- strategic partnership with the banks. And in particular, there is an operator that has announced quite a sizable capital raise and [ my risk --] thinking a little bit the strategy in asset management, even potentially selling a minority stake in the product factories. So I'm just wondering whether how ANIMA is positioned vis-à-vis a situation in which the operator might decide to sell or use their interest in order to minimize the size of the capital raise. Second question is on the net new flow for this year, in particular, in the first quarter as well, how this is going in the -- on the retail side. I have seen that Banco has improved a little bit in percentage, so I'm particularly interested to understand how the sales are going at the Banco level other than Monte dei Paschi. Then I see also margin -- sorry for the long questions, improve a little bit in the fourth quarter. The equity component and other rich component with probably, they have increased a little bit. So I'm just wondering whether you can give us a bit of visibility on margin for this year and any kind of guidance that you might ready to give.

Alessandro speaking. Pretty long questions, so I'll try to answer all of them. Well, first of all, the first question on the -- what happened in the last few days in the banking sector. Well, as we always said, one of the threats we were, let's say, most hearing was in place of buying one of our partners. Because envisage a large and great strong asset management activities. And so I believe that this move, at least, remove, I would say, probably properly this risk around competitive mark from our possible scenarios. UBI was, of course, less effect. We believe it's compared to Intesa. In any case, there were rumor in the last years of the UBI were talking to BP and BMPS. And for us, what's the situation, let's say, neutral with some negative potential. So just to try to have a simple result what we see in the situation after the integrated UBI potential deal for us is a neutral to positive for sure. But what concerned me on the potential capital need of [ BP ] and potential idea are doing something on Arca, we can only repeat what we said in the last 5 years that Arca is -- has an industrial fit ideal for our group. We are flexible and always be flexible in judging potential deals. We will see -- I mean we don't know exactly what may happen. We are always open -- is in our DNA of doing -- growing also by externally. And so we will look at the -- all the potential opportunities open-minded.

But you're very interested -- sorry, if I step in, also into the minority stake, given that in the past, you actually mentioned the possibility of selling the part. Is that sort of a private equity kind of deal?

Listen, the minority stake -- in term of financial -- our financial presence, the minority stake is not our business. I mean it is not necessary -- it wasn't minority stake, we have an industrial component is something that we may evaluate. As always, as I mentioned, we are flexible. We need something making sense for us and for the group. Noting on the net flows from this part of the year, we had -- January, not particularly strong. Even though we want to highlight that it's very difficult for -- at least for companies like ours, look at the net flows only month by month. The situation is better than the last -- than last year. For sure, in the first part of last year, we are seeing strong gross flows. We believe that this year could be a year that we'll follow the path of the last -- of the second part of 2019. And [ which ] of the channel, you mentioned, are doing better of last year, and they are increasing the results. They started January with strong gross flows but with a small net, let's say, with lower just in terms of net new flows. Now they are accelerating, so we are positive on -- in this side. Margins, Q4, yes, margins were, in fact, were positively impacted by market effect, I would say, really. We are looking at the incoming year. We are pretty positive of being able to keep the margin stable. You also -- we have also taken into consideration that the -- again, this component that presently -- that may provide some volatility. We started well on these items, so we don't expect a negative impact. So overall, I would say on the core margins, we expect stability, of course, always with the caveat of market effect -- market performance.

Next question is from Elena Perini with Banca IMI.

Yes. I've got 4 questions. The first one is on the outflows from Class I. I would expect them to go on given the current environment on the interest rate side. Would you expect them to be of the same amount of last year or to even increase in terms of magnitude? And then about your performance fees, I was wondering if you can share with us the level of performance fees you had in this first part of the year. And then on the cost side, can you provide us with some guidance on the current year, given that you exceeded your targets on cost synergies from the integrations and then an outlook on the tax rate?

Elena, Alessandro speaking. I will start from the Class I outlook. As you know, Class I insurance for us is mainly constituted by Euribor business. In 2019, as Marco mentioned before, we had a massive positive performance effect in this asset class. And then in November and December, EUR 3 billion approximately of outflows due to start adjustments in the strategic asset allocations of our insurance partners. And so as we said, fully related to commercial dynamics. I would like to remind you that this part of the business has a very low profitability, low single digit. That's why we decided to provide monthly into only the AUM value of this asset class and not looking at the flows because last year, we had a massive positive market perspective, and then probably also related to that, a part of outsource. It's very difficult for us to provide a guidance for 2020 on this part of the business because this is related to, let's say, to the [ recast ] allocations on insurance groups. And so I mean I don't have a number to provide you. I remind you again that this is a low single-digit cost to this business. In terms of performance fees, we started well, but we cannot provide you the number. On the cost side, in terms of the guidance potential on the cost side, we keep our guidance in terms of low single-digit growth, of course, apart from one-off investment, let's say, on the alternative business. And on the research team, that may account for EUR 3 million, EUR 3.5 million next year. Last was the tax rate. I would say something in the region of 30%, 32% of the activity.

Your next question is from Federico Braga with UBS.

Yes. Three questions from my side, please. The first one is with regards to your comments on M&A., I was wondering if you could remind us if you have any leverage constraint? If I'm not wrong, you have some covenants at 2.5 net debt to EBITDA. But if you can give us more color on this would be appreciated, please. The second question, again, given your comments on M&A, what's the likelihood, in your opinion, to seeing the buyback program fully completed? And the last question is if you can give us more color on the flows outside of the BAMI channel. I mean BAMI has been probably the key, not the only driver of flows in the second half of the year, so I was wondering if you could give us more color on what's going on the rest of the business, especially in terms of some product initiatives. Or also competition, how it's evolving outside of the bank channels.

Alessandro speaking. So let's say that in terms of leverage constraints, you're right, we have a covenant of 2.5x based on [ BBA ]. We are today at 0.8, 0.9 in the region. So when you look here at the covenant, we have more or less the basis -- the known basis of EUR 200 million. That is -- more or less sounds like a reasonable amount between EUR 300 million and EUR 400 million, something that we may -- if we -- we sustain on a loan basis. On top of that, of course, the potential leverage coming from the asset eventually bottoms. In terms of the second question, sorry, Federico, I didn't get it very well. What was exactly your question?

Yes. If you -- I mean, what's the likelihood of seeing the current buyback program fully completed? I mean you have room to buy back up to 10% of your shares. You have completed almost completely 6%. So I was wondering, given your comments on M&A, if now you're going to wait and see how M&A evolves before deciding if continue or not your buyback? Or regardless what could be your approach on M&A, we could expect the buyback to be fully completed.

Well, let's say that as we -- as per our -- as what we communicated to the market after we got the [ leg off ] Today, first of all, we will propose to the AGM the cancellation of 3% of the shares already bought in the programs we have in place and we completed last year. We will also propose to the AGM the renewal of back mandate to the Board of Directors, 18 months up to 10%. Then of course, we will need to discuss with the new Board of Director, given that we will have the AGM with the new director on March 31. We'll have to discuss the future in this respect. And as we -- as management team, as we've demonstrated in the past, when we don't have M&A coming, we look at the [ either -- ] and we come with our own. So this is our mindset and we will continue to this line also going forward. In terms of flows, the beginning of this year, let's say that, in general, on the retail side, we see a lot of gross inflows. This means for us, but we -- on January 3, there were many client taking profits from the good performances registered in 2018. We are not seeing yet the strong outflows from the liquid some current accounts. But as we just remind you, of course, the larger pool where our sector can try to take a lot of money to go, let's say, in the next future. We are working strictly with our partners or strategic partners, trying to bringing the net closer in order to help them to move the liquidity out of the current accounts. The products, we would say, we'll try to push as much as possible in this year. Where we met our EAI for sure, that are just started basically. ESG is something where we -- all the market is pushing a lot and we are doing the same thing. And the Pic -- the -- the so-called, we can now PicPac, the world evolution funds, of targeted funds, where we have an exposure to the -- growing exposure in a targeted fund to lift the market of dollar cost average in the target days. This provides less volatility to the client with a high portion of equity in the portfolio.

Next question is from Angeliki Bairaktari with Autonomous Research.

Two questions on my side. If I may just come back to the retail flows. These were -- I can see the improvement from the first half to the second half but the second half and the fourth quarter remain in negative territory. So I was just wondering, should we have the hope/expectation that retail flows will turn positive in 2020? Or would that be too optimistic in your view? Meaning all these initiatives that you're now launching in terms of PIR, ESG, et cetera, could these turn the flows to positive in 2020 in the retail channel? And my second question, do you see demand from retail clients in Italy on ESG products? Or is that primarily a marketing -- sort of a marketing tool that distributors are using and will hope to attract flows?

Well, I'll start from ESG. With ESG, it's important as a component of marketing as always, for sure. But we, as ANIMA, we did last year a massive effort in terms of providing rating to all our funds and to set up a new system of funds with more strict, let's say, criteria related to ESG. So of course, it's also used by -- in terms of marketing, but it's something that we are perceiving the client base is very keen in having. So it's something that has -- we believe may have an impact on the flows. In terms of retail, well, just to probably -- I would like to bring you to the idea that part of the institutional business we have is also related to the retail business in the sense that we are -- as in our mind, we also distribute -- we also are managed underlying conveniently and [ start segmenting ] for several insurance groups. These products, again, would then goes on the network, and in terms of value position, more or less similar to the mutual funds that we are selling directly. If you look at the entire retail, production will be positive. Looking at mutual funds on the retail is very difficult for us today to say it will be positive in the single item and not underwritten. So overall, I would say, written positive, including also the production on the insurance business Unit Linked.

If -- that's very helpful. If I may just follow up on the Unit Linked component in institutional. Should we expect your institutional margin to improve slightly on the back of this dynamic of retail Unit Linked flows?

Well, we -- on the Unit Linked side, our profitability is pretty high, so it's accretive. If you look at the entire component, so also the underlying of the year book. So this may be beneficial. Then, of course, as I mentioned at the beginning of the call, the margins will depend very much also in the market effect. And if you look at the average margin, also the effect coming from the Class I mandates because this means we can have on these assets may change the average profitability quite significantly.

Your next question is from Filippo Prini with Kepler.

I have 2 brief questions, if I may. The first one is on PIR. We've seen that in January, it's been still [ outpost ] on this product, but I think that you did much better than the market. If you can please confirm that? And if you can share what are maybe some expectation for the -- for influence on PIR in the month of February? And if you feel that should be a risk that this product can cannibalize other product, so that at the end, the net benefit for your inflows at group level should not be so big. And the second question, just a follow-up on the variable part of labor cost, if -- should we expect going forward, a different sharing of performance fee with the labor force? Or is it was just the case of the last quarter of 2019?

Filippo, it's Alessandro. Well, on the PIR. The PIR, we started slow because, let's say, that we were very, very fast in reactivating the products. But the distributor had a new setup and approval process to be put in place, so we started basically as February. So we -- it's difficult for me to provide you clear ideas on numbers as of today. We expect in this product to be something successful during the year. We have several numbers in the market going from EUR 3.5 billion to EUR 7 billion. It's difficult to process a number for the entire market. We believe that in this pretty wide range because we'd give up potentially the real number. We have an 80% market share in the market, which I believe that we can keep our market share for being a little bit better. In terms of cannibalization, what we have to be a PIR fund, the one on the equity side in the balance fund, that we may have some cannibalization. This is -- I mean potentially is a threat. But looking at the margins, the equity product is absolutely in line with other equity products. The balance funds, is a little bit more -- it's a little bit attractive in terms of margins for us. So even if we have some cannibalization in terms of flows and we may have an accretive potential on license. Variable level cost. Well, the variable level cost depends very much -- is related to performance yield, depends very much as we always said, by the products taking performance fees. As I mentioned in the presentation, we were -- the performance fees were mainly focused on product, structured products, quantitative products, while the ATM, portfolio manager component is less relevant in our opinion. And therefore, will be a bit less in terms of variable compensation. It may vary. It may vary depending on where we will catch performance fees.

The next question is from Carlos Gutierrez with Dunas Capital.

My question is regarding the new alternative asset classes as a new company. If you could please give us a guidance on the -- in the business plan mainly regarding assets under management projections, other strategies to be launched apart from the private debt. And if you could also look at the M&A to further grow this new business.

Alessandro speaking. Well, let's say that we -- we cannot disclose the business plan yet on the business. We are going into the authorization process in these days in Italy to the approval for the company. What we can say is that we will -- we want to launch the first fund by Q3. This fund will be -- will have a large component of private debt, direct lending, I mean, bond, leverage finance. We have a component ideally of more just asset classes like mezzanine or something like that. And this is the idea on the first fund. We hired very senior and skilled professionals. And we believe that this could be a successful first fund. Going forward, we would like to expand for full -- in terms of asset classes if the project will be successful. Looking at the DNA of our company, we feel as of today that probably we are more close to asset classes like infrastructure, funds of funds, private equity funds of funds things like that, more than, for instance, real estate or private -- majority private equity directly. So we don't have yet a program that we have ideas that we show to both the director. We are now focusing on the first fund to start with the right foot. And in terms of M&A in this business, to be honest, as of today, something we are not taking into consideration. We will see. Now we start and then we will be able to start in the right direction. Let's see.

The next question is from Alberto Villa with Intermonte.

Goodbye and all the best to Marco for his future. Again, one more question on the alternative investments. Can you give us an idea of -- I mean is this going to be targeting retail investors? Are you planning to issue products with a very low entry level in terms of investments? Or it's more like for institutional clients? I was wondering, considering that your average customer is a small ticket invested with you and your products and a relatively low wealth, if these products are targeting your customer -- retail customer base? Or more like the institutional?

Well, the first fund will be directed to institutional, absolutely. We are not seeing -- I mean, we don't believe in -- of doing something else to alternative funds from the retail for the sale of customer investing on average of EUR 20,000, EUR 25,000 in the funds. We may look at the -- with the strong interest of the LTIP, where we may put a component of liquids in the future. And the LTIP will be addressed, for instance, to private for a trust fund. Of course, we believe that yes, this would be -- the push on the LTIP with the fiscal advantages to be fixed as well. For the time being, we don't see a stronger, say, strong momentum on these products in the market.

Your next question is from Luigi De Bellis with Equita SIM.

Yes. Just one question for me. On the M&A, you mentioned that you are very flexible in the strategy. We have recently seen some deals overseas. Are you open to evaluate opportunities also abroad? And if yes, what are you looking in terms of potential characteristic of targets in terms of products or customers?

This is something we mentioned in the last year in the sense that, yes, we are open to look at potentially abroad. The management team, what we see as an opportunity, is the idea of growing in terms of capabilities and brand, potentially on to be spend, for instance, in Italy. And this could be a similar and impressive synergies. We believe on segments where we are less strong in terms of penetration, the banking, financial values, metrics and institutional. Though we see a potential and industrial fit in ANIMA and potentially some -- or a foreign group, it's not easy. It's something that -- but we are open to look at.

The next question is a follow-up from Federico Braga with UBS.

Yes. Sorry, I have a follow-up question on your ESG initiatives. I was wondering if this can have any impact on your relationship with Etika. If I'm not wrong, also Etika distributes its funds to BAMI. So I was wondering if you could give us some color in terms of feedback that you got from Etika. And again, if we could expect any impact on your relationship with Etika.

Federico, absolutely not in the sense that Etika has -- the business run by Etika is far more, let's say, strong in terms of ethics requirement and the REIT scene. But the user since many years. And so we -- let's say that our offer is not in competition, absolutely with the offer of Etika. There is a different in terms of features and in terms of requirements.

Mr. Carreri, currently, there no more questions registered at this time.

I think that we have concluded. Thank you all for your time, and see you in the coming future. I hope so. Bye-bye.

Thank you. Bye-bye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.