The conference's aim is to describe the most significant trends in this industry and to increase knowledge learning from the experiences of several of the most representative operators by evaluating the development opportunities in Italy.
"The rules governing speculative funds have given Italy a competitive advantage to be exploited," says Massimo Capuano, Borsa Italiana's Managing Director, "because it allows the Italian market to expand internationally, attracting operators, even foreign ones, with new products and increasingly efficient services.
The aim of Borsa Italiana, always open and attentive to innovation, is to confront the international experience through these important moments of reflection to create new opportunities for clients and to offer new products and avant-garde services to the financial services industry."
"This event," added Raffaele Jerusalmi, Head of the Markets for Borsa Italiana, "is intended to be an opportunity for information and education: in fact, it is in our interest, and I suppose in the interest of the market as a whole, to increase the financial knowledge of investors and to promote greater awareness of the Hedge Fund product, so that the industry can evolve, aware of the opportunities as well as the potential risks."
The creation of the first domestic Hedge Funds - authorised and regulated by Banca d'Italia - represented an important moment in the evolution of the Italian financial market. In fact, Hedge Funds are among the greatest liquidity providers for many stock exchanges and are traditionally characterised by a high degree of sophistication.
The development of a domestic Hedge Fund industry will allow Borsa Italiana to expand and diversify its client base and attract more foreign Hedge Funds to operate on the Italian market. Borsa Italiana is studying high added-value services for them.
Today, the Italian Hedge Fund industry is characterised by a prevalence of "fund of funds" offerings.
Banca d'Italia authorised the first fund of funds in April 2001 and the first single manager fund in July 2002.
As of today there are 21 Investment Companies authorised by Banca d'Italia to manage a speculative fund for a total of 46 funds, of which 41 are funds of funds and 5 are single manager hedge funds, of which one has a Long/Short strategy, one a Global Fixed Income, one a Global Equity and two, not yet operational, are Multi-strategy funds.
As a whole, operational Italian Investment Companies manage assets for about 2 billion Euro (data as of 31 August 2002).
These are the most significant advantages offered by the presence of Hedge Funds on the market:
- Greater stability of trading volumes - As a rule, Italian investors, whether individual or institutional, follow investment strategies strongly correlated with the market trend. Hedge Funds, on the other hand, propose to achieve an absolute yield relative to a predetermined average annual volatility and pursue this objective through strategies of non-correlation with the markets; they, thus, operate predominantly in countertrend, not conditioned by the upward or downward direction of the market. In this sense, they are able to provide more stable trading volumes, even in the presence of a declining market.
- Greater market efficiency - The presence of operators with non-traditional strategies and logic has positive reflections on the market, in particular on the liquidity and pricing of listed instruments.
- Offering new services - Borsa Italiana is also studying value-added services to offer to the Hedge Funds.
