Azimut Holding’s 2021 Is Record-Breaking

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( — September 30, 2021) —

Gabriele Blei: the goal is to close the year with over 6 billion in net inflows.

Azimut Holding, an Italian company among the largest asset managers with private equity operations catered to retail investors in the world with assets under management of more than 77,000 million euros, is registering record performances in 2021, both in terms of net inflows and in terms of shares on the stock exchange. We talked about it with the CEO Gabriele Blei.

In August Azimut recorded net inflows of 648 million euros, reaching a record figure of 14.3 billion since the beginning of the year. How are these results possible? What is the goal for the end of the year?

In 2021 we have achieved significant inflows so far, thanks to the contribution of our distribution networks which have benefited from the launch of new funds both in the range of open-end funds, as well as illiquid products to support the real economy which have contributed for 35% of the net new money of funds since the beginning of the year. In addition, the work of our Global Asset Management Team generated a performance to the client, net of costs, which varies between +5.5% and +6%. In Italy our financial advisors raised € 2.3 billion, but above all this figure has an even greater prominence for the quality of funding and the work in progress to reposition the client’s asset allocation on products that invest in private markets, which in the current macroeconomic scenario, will contribute to generating the extra performance to provide positive returns in the medium to long term. Internationally, we generated positive net inflows of € 4.6 billion to which € 7.4 billion of net inflows linked to M&A transactions concluded in the USA and Australia must be added.

In a scenario of normal markets, we hope to continue the positive trend also in the last four months of 2021, despite the strong seasonality of September. The goal is to close the year with over € 6 billion in net organic inflows and, after August, we are confident that we can exceed this level.

In this very positive picture, what is the impact of the real economy?

The real economy is entering the portfolios of our customers because there are no alternatives. Over the decades, our clients’ investments have had to evolve with the market and now bond and balanced portfolios are no longer enough to generate positive returns. Today, to achieve similar returns, we need to diversify more and introduce new asset classes as drivers of future performance. The real economy, across different types of equity, credit, real estate etc. should have a weight between 15% and 30% to generate a positive impact on portfolios in a context of zero-negative rates, which central banks are preparing to gradually raise. Today Azimut has an exposure in alternative funds equal to € 3.5 billion out of the € 78 billion of total assets. We are among few that do this for retail clients through a network of financial advisors, but this allows us to build a solid track record and deliver returns to our clients.

The Azimut stock has reached and for the first time exceeded the pre-pandemic values: how was this possible?

Azimut closed the first six months of 2021 with growth in net profit of 58% to € 226 million, but what is even more relevant are the recurring net profits up almost 100% year on year. Because of this we have raised our net profit target for 2021 from € 350 million to a range of € 350-500 million, assuming normal market conditions. This will lead us to generate cumulative net profits in excess of € 1 billion between 2019 and 2021, with a net margin at the top of the system. Nonetheless, our market capitalization has only minimally discounted this growth, even though we are happy to be back to pre-pandemic levels. However, our valuation remains at a discount of between 40% and 60% compared to our competitors, despite a business model that generates cash, pays dividends, is diversified and grows.

Despite the positive trend of recent months, a certain nervousness remains on the markets, as if we were on the eve of a possible negative event. What’s your idea about it?

The equity markets have recovered to pre-pandemic levels, the bond sector has began to generate negative returns and it is important to review the asset allocation in the medium to long term. Today we live in an environment with ample liquidity, which central banks will gradually begin to withdraw, while inflation represents one of the main risk factors and we question whether or not it is temporary, with the effect that this will have on the rise of yield curves. On the other hand, growth after the pandemic is strong and we are at the beginning of the European Next Generation EU plan which will deploy an important investment plan. All of this may have a positive impact on growth and corporate earnings, but we cannot rule out an increase in volatility given the changing macroeconomic environment, the valuations of listed asset classes which tend to be at the top of historical averages and the effect of the increased prices of raw materials as well as the lack of some fundamental components for many industrial sectors.

Our clients can count on a strong expertise with over 150 professionals in 17 countries on both liquid and illiquid assets and a product, geographical and risk diversification that will allow us to take advantage of any market reversals to invest with a medium- long term investment horizon and generate positive returns. Our task will be to manage emotional behavior and diversify as much as possible.