Eurizon set to launch active strategy as first ETF


Eurizon set to launch active strategy as first ETF

By Dom Lawson 2 April 2024



UK-based subsidiary seeks to launch emerging market debt product

Eurizon, the asset manager owned by Intesa Sanpaolo, Italy’s largest bank, is planning to launch its first exchange traded fund.

The firm’s London-based subsidiary, Eurizon SLJ Capital, is preparing an Ireland-domiciled emerging market bond strategic income ETF.

The ETF will be an actively managed product aimed at the UK market and is subject to regulatory approval, according to a person with knowledge of the matter.

The investment manager, which specialises in fixed income and currency strategies, has been majority owned by Eurizon since 2016, when it launched as a joint venture with UK firm SLJ Macro Partners.

The plans come in the wake of both Abrdn and Axa Investment Managers entering the European ETF arena with actively managed products over recent years.

Active ETFs in Europe attracted net inflows of €5.9bn over the past 12 months and €18.6bn over the past three years, Morningstar data to the end of January shows.

Eurizon is currently one of the largest fund houses in Europe without an ETF business, managing €159bn of mutual fund assets, according to Morningstar.

Michael O’Riordan, founding partner at BLACKWATER, says Eurizon’s plans show that ETFs “are now being taken seriously by mutual fund managers because they need to be in the game if they want to stay relevant”.

“Eurizon are probably at the front of a long forming queue,” O’Riordan adds.

A recent BLACKWATER survey found that most European mutual fund managers are concerned about the growth of ETFs, but a rising number also believe the market for the products presents opportunities.

The research found that the number of managers with plans to “either launch ETFs or intensify due diligence within the next two years” has risen from 9 per cent in 2021 to 92 per cent this year.

Eurizon’s plans also come at a time when greater uptake is expected of active ETFs in Europe, albeit at a lower rate than in other regions of the world, according to a PwC survey published earlier this month.

Meanwhile Carne Global Fund Managers is listed as the management company for Eurizon’s planned ETF.

Mark Stockley, chief business development officer at Carne, says his firm has recently expanded its ETF offering to include fund listing services.

“[This] was a natural evolution for us following client demand,” he says.

Stockley says his firm is seeing “strong demand” as new entrants “seek to provide innovative solutions”, as well as from “traditional asset managers looking to establish a foothold in the ETF space for the first time”.

Carne is looking to hire for its team “in a targeted way”, he says, adding that “supporting ETF launches in Europe is certainly a key area for [the firm]”.

Ignites Europe reported in December that several firms with new ETF vehicles had yet to register their products in the UK, amid Brexit-related regulatory delays. The UK financial regulator has said it plans to introduce a new regime for overseas funds in April.