THE GOOD PARLOUR

AP Private | September October 2023

Gaining access to the key places of finance frequented by the elite of entrepreneurship requires more than just money: right revenues and connections as well as an important surname.

This is what has been highlighted by a survey conducted by FINER on a sample of 1.200 private clients (with assets worth between 1 and 5 million euros) and 200 HNW clients (with assets worth between 5 and 30 million euros).

76% of private clients and 84% of HNWIs believe the desire to play an active role in investments through the acquisition of shareholdings in unlisted companies with a big growth potential, trophy real estate or illiquid goods to be rather widespread.

This desire clashes with a pervasive sense of frustration: only 17% of private clients and 34% of HNWIs have had access to direct investments in unlisted companies over the past 12 months.

The main reason is that gaining access to investments in unlisted companies requires specific skills as well as a team of experts (according to 59% of private clients and 66% of HNWIs), right revenues in key environments (44% of private clients and 59% of HNWIs) and assets worth tens or hundreds of millions euros (according to 69% of private clients and 37% of HNWIs).

It would seem that some private banks (especially American and Swiss, as well as a few Italian banks) do not welcome clients with assets under thirty million euros, who are not part of the establishment and lacking references by clients with an important surname.

In Italy, as in the Anglo-Saxon world, several exclusive clubs have been gaining ground – they can offer to a restricted group of people the possibility to access investment opportunities earlier and under better conditions than the rest of the world.

Among them is The Equity Club, a club deal venture including ninety families of entrepreneurs and promoted by Mediobanca, which has always been viewed as the parlour of Italian finance.

However, the search for alternative investments has opened the market to less selective and more welcoming instances, which aim at democratizing investments in real economy as well as illiquid investments by mediating directly between entrepreneurs and investors.

Among them is AZIMUT, a pioneer of the financial sector and the first to open the market of investments in real economy to networks of financial advisors, followed closely by other businesses.

Exclusive club deals, reserved to UHNWIs (with assets over 30 million euros), could therefore coexist with other businesses accessible to affluent clients (with assets worth under 500.000 euros), private clients (under 5 million) and HNWIs (between 5 and 30 million).

In order to survive, both models – the more selective and exclusive one and the more democratic one – will need to prove concretely to be able to bring value to investors in addition to lavish margins to advisors themselves.

Meanwhile, two highly topical mottos attributed to Erico Cuccia, founder of Mediobanca, come to mind: “actions are not to be counted, but rather weighed” and “fifth article, people with money have won”.

Nicola Ronchetti