The Italian Asset Management market

key figures 23 April 2014 Research Department

1. Summary statistics Open-end funds Mandates The recent mkt recovery, some tentative explanations 2. The European Investment Fund Industry Net assets & sales by fund / fund group domicile 3. Savings & Wealth Household saving rate: trend & int l comparison Household financial portfolio & private pension plans

The Italian AM market (Jan 2013:Mar 2014) AuM, net flows & performance, bn. 4

Net flows are rebounding 20 18 16 14 12 10 8 6 4 2 0 2 4 6 bn Jan Feb Mar Apr May Jun 2012 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2013 Jul Aug Sep Oct Nov Dec Jan Feb Mar 2014 Monthly data. Source: Assogestioni. 5

Product breakdown +24.8 +0.07 +0.00 2014 I E +13.9 2013 I Open end Funds +19.2 II +7.0 III +6.4 IV 2014 I E +46.5 +15.9% 591 43% 4% 43 43 3% +0.04 2013 I 0.04 II +0.04 III IV +0.1 +0.4% Closed end Funds Retail Mandates (discretionary portfolios) +2.1 100 7% 656 47% Institutional Mandates +9.0 1.2 +2.2 IV 2014 I E +1.0 +0.3 II 2013 I 2013 Net Flows 2013 Asset growth rate +0.3 III +0.1 IV 2014 I E +1.7 +5.9% +6.0 2013 I 5.3 +0.3 II III +14.1 +9.7% 6

Long term trend bn, yearly data. Source: Assogestioni. 7

AuM (Mar 2014) Top 15 Groups Net flows 2014 :M3 2013 0% 2% 4% 6% 8% 10% 0% 5% 10% 15% 20% 25% GENERALI EURIZON CAPITAL BANCA FIDEURAM PIONEER INVESTMENTS ANIMA HOLDING POSTE ITALIANE ALLIANZ MEDIOLANUM UBI BANCA FRANKLIN TEMPLETON BANCO POPOLARE AXA AMUNDI BNP PARIBAS ARCA AZIMUT bn 2% 3% 4% 4% 8% 382 204 61% 73% 82% 0 40 80 120 160 200 Funds 27% 15% * 27% 0 3 6 9 12 15 Mand. x%: Mkt share + 0 3 6 9 12 15 Net sales as % AuM 8

Open-end funds: domicile breakdown Mar 2014 591 Dec 2009 438 15% Dec 2012 482 28% 30% 42% 36% 20 48% +18.5 2013 Domestic +10.7 R trip/offshore +16.1 Foreign +19.7 2014 :M3 +6.6 +13.1 +5.0 10 0 +11.9 +5.1 +4.6 +10.3 20 15 10 20 13.9 10 24.7 5 30 34.5 4.0 40 0 2010 2011 2012 2013 I II III IV 2014 :M3 AuM & net flows, bn. 9

Top 15 Groups (open-end funds only) AuM (Mar 2014) Net flows 2014 :M3 2013 0% 4% 8% 12% 16% 20% 0% 6% 12% 18% 24% 30% EURIZON CAPITAL BANCA FIDEURAM PIONEER INVESTMENTS GENERALI ANIMA HOLDING MEDIOLANUM FRANKLIN TEMPLETON ARCA AZIMUT UBI BANCA JPMORGAN BNP PARIBAS BANCO POPOLARE AMUNDI SCHRODERS PICTET bn 2% 4% 3% 6% 6% 9% 11% 5% 52% 70% 80% 15% 0 10 20 30 40 50 60 70 80 90 Domestic n.a. +8.5 0.0 0.5 1.0 1.5 2.0 2.5 R trip/offshore Foreign x%: Mkt share + +40% +46% 0 1 2 3 4 5 6 Net sales as % AuM 10

Asset Class breakdown TOTAL 22% 5% 5% 47% 19% DOMESTIC 12% 6% 50% 25% 167 bn 31% R TRIP/OFFSHORE 21% 6% 44% 22% 213 bn 40% FOREIGN 36% 4% 49% 155 bn 29% 0% 20% 40% 60% 80% 100% Equity Balanced Money Market Bond Flexible Hedge Dec 2013. 11

Equity & balanced funds AuM (Dec 2013) Net flows 2013 2012 0% 10% 20% 30% 40% 0% 5% 10% 15% 20% ITALY EURO AREA 4% 5% EUROPE 21% AMERICA 16% PACIFIC AREA 8% EMERGING MKTS 13% SPECIAL. COUNTRY 6% GLOBAL 15% SPECIAL. SECTOR 8% OTHER 3% +82% BALANCED bn 0 5 10 15 20 25 30 0 2 4 6 8 0.0 0.5 1.0 1.5 2.0 Domestic R trip/offshore Foreign x%: Mkt share + Net sales as % AuM 12

Money mkt, Bond, Flex & Hedge funds MM FUNDS AuM (Dec 2013) Net flows 2013 2012 0% 8% 16% 24% 32% 40% 0% 10% 20% 30% 40% ITALY 3% EURO GOV. SHORT T. 12% EURO GOV. M/L TERM 12% EURO CORPORATE / HY 11% DOLLAR AREA 2% GLOBAL EM MIXED 6% 5% 10% +64% +51% SPECIALIZED 18% FLEX (BOND) 22% FLEX HEDGE bn 0 10 20 30 40 50 60 70 80 90 100 Domestic 0 6 12 18 24 30 R trip/offshore Foreign x%: Mkt share + 0 2 4 6 8 10 12 14 Net sales as % AuM 13

Net & gross flows Net ( bn) 30 100 Gross ( bn) 90 20 80 70 10 60 50 0 40 30-10 20 10-20 0 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 50% 40% 30% 20% Gross Sales Gross Redemptions Net Sales Funds w/net Sales>0 14

Gross flows: captive vs. non-captive ManCo Captive 55 50 45 40 35 30 25 20 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Non captive 55 50 45 40 35 30 25 20 Gross Sales Gross Redemptions 15

The blockbuster effect : top quartile funds take all MMF / Short Term Tot. / Abs. Return Target / Coupon Target / Tot. / Abs. Return MMF/ ST Target / Coupon MMF/ ST Target / Coupon Tot. / Abs. Return Coupon Tot/Abs Target / Target / Corporate Corporate MMF/ ST Corporate MMF/ ST Corporate MMF / Short Term Return Coupon Coupon ML Bond 50 40 30 20 10 0 10 20 30 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Net flows, bn. I II III IV Top 1% New Stories 16

New stories: they sell well... but how long? 12 10 8 6 4 2 0-2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 Curr. +1Q +2Q +3Q Newly launched funds ( new stories ): net flows in current & following 3 quarters. bn. 17

New stories tag cloud Year 2010 2011 2012 2013 New funds 439 536 578 560 INDEX CONVERTIBLE EMERGING SELECTION BREVE CEDOLA EQUITY MONEY SELECTION CONVERTIBLE 20 COUPON CASH BOND STRUCTURED MONEY CORPORATE PROTETTO ETF BOND CASH COUPON FORMULA STRUCTURED MONET PROTETTO CORPORATE ETF BOND 20 CEDOLA INDEX STRUCTURED MONET ASIA EQUITY LIQUID MONET EMERGING FORMULA BOND CORPORATE SELECTION INDEX BREVE ETF 20 CORPORATE EQUITY CEDOLA ETF CASH MONET PROTETTO BREVE MONEY EMERGING 20 ASIA LIQUID SELECTION BREVE COUPON FORMULA CONVERTIBLE CASH MONEY STRUCTURED PROTETTO CEDOLA EQUITY ASIA LIQUID CONVERTIBLE LIQUID ASIA INDEX FORMULA COUPON EMERGING 18

Mandates: AuM & Net Sales trends AuM (Dec 2013) Net flows 2013 2012 0% 2% 4% 6% 8% 10% 0% 3% 6% 9% 12% 15% DISCRETIONARY MANDATES (GPF) 3% DISCRETIONARY MANDATES (GPM) 10% PENSION PLANS 9% INSURANCE PRODUCTS (TRADITIONAL) 437 60% INSURANCE PRODUCTS (UNIT & INDEX L ED) 8% OTHER 10% bn 0 20 40 60 80 Foreign Co. Domestic Co. x%: Mkt share 0 3 6 9 12 15 + 0 2 4 6 8 10 Net sales as % AuM 19

Top 15 Groups (mandates only) AuM (Mar 2014) Net flows 2014 :M3 2013 0% 2% 4% 6% 8% 0% 5% 10% 15% 20% GENERALI EURIZON CAPITAL BANCA FIDEURAM POSTE ITALIANE PIONEER INVESTMENTS ALLIANZ AXA BANCO POPOLARE AMUNDI UBI BANCA ANIMA HOLDING CREDIT SUISSE BNP PARIBAS CREDITO EMILIANO STATE STREET MONTEPASCHI bn 1% 2% 3% 3% 5% 325 118 6% 78% 88% 93% 0 10 20 30 40 50 Retail 43% 15% 9% 0 1 2 3 4 5 6 Instit. x%: Mkt share + +34% 0 2 4 6 8 Net sales as % AuM 20

The market for Institutional Mandates Insurance products Managed by ManCos Pension funds As is... (2013 Q4) 457 73% 39% 159 As is... (2013 Q4)... and as could become: Household portfolio: share of insurance products & pension funds (2013Q3) IT FRA GER UK USA 18.0% 34.4% 34.9% 55.1% 31.8% Source: ANIA, Covip, Adepp, Assogestioni, Eurostat, OECD. 21

Despite the economic crisis which is still affecting heavely our country, and despite the fall in the household saving rate, net flows into funds and mandates are rebounding. Why? Some tentative explanations that can be drawn looking at the general features of the market (1), savers (2 & 3), distributors (banks, 4 & 5) and management companies (6).

1. A pro-cyclical market MSCI WORLD (Loc) bn, yearly data. Source: Assogestioni, MSCI. 23

2. Wealth is concentrated top tier investors hold most of the money pot (italian funds, 2013) Average investment Median investment 26.156 10.867 Average Median x 2.5 Quartile % of assets Limit ( ) 1,4 6,9 17,3 74,4 3.868 10.867 27.932 25% of shareholders control 75% of assets 75% of shareholders invest less than 27k Italian funds. Source: Assogestioni 24

3. Bank deposits pay low interests 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Feb 2014 Interest rates on bank deposits, households. Source: Bank of Italy. 25

4. Banks are becoming less dependent on funding from retail 30 20 10 0 10 20 30 40 2007 Q1 Q2 Q3 Q4 2008 Q1 Q2 Q3 Q4 2009 Q1 Q2 Q3 Q4 2010 Q1 Q2 Q3 Q4 2011 Q1 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Retail Bank Bonds Domestic and Round Trip Funds Foreign Funds Quarterly flows, bn. Source: Assogestioni, Bank of Italy. 26

5. Narrowing interest margins... Commercial bank gross margins (Difference between interested paid out on deposits and paid in on bank loans) Source: ABI/Bank of Italy. 27

... are pushing banks to increase commission-based margins Main balance sheet indicators (YoY% change) Assets & Liabilities Loans Deposits Profitability Revenues of which: interest margin net commissions Costs Results and forecasts for Italian listed banking groups. Source: Bank of Italy. 28

6. The success of funds with high margins (target-date funds) MM FUNDS AuM (Dec 2013) Net flows 2013 2012 0% 8% 16% 24% 32% 40% 0% 10% 20% 30% 40% ITALY 3% EURO GOV. SHORT T. 12% EURO GOV. M/L TERM 12% EURO CORPORATE / HY 11% DOLLAR AREA 2% GLOBAL EM MIXED 6% 5% 10% +64% +51% SPECIALIZED 18% FLEX (BOND) 22% FLEX HEDGE bn 0 10 20 30 40 50 60 70 80 90 100 Domestic 0 6 12 18 24 30 R trip/offshore Foreign x%: Mkt share + 0 2 4 6 8 10 12 14 Net sales as % AuM 29

Net Assets by fund domicile 2,680 +2% +10% 9,988 +2% +9% 1,565 +3% +1% 1,435 +2% +9% 1,148 +2% +16% 1,381 +3% +9% Ucits Non Ucits 71% : 14 M2 Growth 13 rate 27% MMFs 95% Spezialf. 368 +3% +20% 216 +3% +10 France 16% Germany 14% UK 11% Switzerland 4% Italy 2% Luxembourg 27% Ireland 14% Europe 100% 47% 41% 2014 February bn. Source: Efama, AFG, BVI. 31

Net Assets by fund domicile Long-term growth 500 400 300 200 Ireland Luxembourg UK France Germany 100 Italy 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Index values. Source: Efama. 32

I II IV 5% III 10% I II 26% IV III Italy 5% 3% 1% +1% +3% +5% IV III I II +11 12 32 2013 2012 2011 2010 2009 2008 Net sales by fund domicile 5% 3% 1% +1% +3% +5% 6% France 75 24 91 Germany 5% 3% 1% +1% +3% +5% +87 +78 +40 +8% UK 5% 3% 1% +1% +3% +5% Luxembourg 5% 3% 1% +1% +3% +5% Europe 5% 3% 1% +1% +3% +5% II III IV I IIIII IV I III I II IV +27 2013 +31 2012 +22 2011 +10% +8% 2010 2009 2008 6% +194 +123 +5 +9% 5% +410 +307 +13 Net sales as a % of AuM. Yearly data in bn. Source: Efama, BVI. 33

5% 3% 1% +1% +3% +5% IV III 2013 III IV I II 2012 II III IV III 2011 I 1% 1% 8% 2010 2009 14% 12% 2008 IV I III IV III III II I Italy UK 5% 3% 1% +1% +3% +5% 1% 3% II III IV Net sales by fund domicile & asset class 4% 3% 2013 2012 2011 4% 2% 2008 '09 '10 5% 3% 1% +1% +3% +5% 1% 2% 6% France Luxembourg 5% 3% 1% +1% +3% +5% 3% 3% Equity+Balanced +Flexible Bonds+MM Others+Non Ucits 4% 2% Germany 5% 3% 1% +1% +3% +5% +1% 7% Europe 5% 3% 1% +1% +3% +5% Net sales as a % of AuM. Source: Efama, Assogestioni, BVI. 34

Net Assets by fund group domicile 2,615 58% 9,788 1,739 +3% +9% 1,842 +8% +12% Exp 10% 1,947 +15% +20% Exp > 90% 730 +12% +10% 406 +12% +2% 1,344 39% Domestic Funds Ucits Domestic Funds Non Ucits Luxembourg Funds Irish Funds 13 Growth rate 12 France 12% Germany 24% UK 42% Switzerland 51% Italy 48% Luxembourg Ireland Europe 2013Q4. bn. Foreign share in %. Est. on Efama, Assogestioni, ALFI & IFIA data. 35

Net sales: fund domicile vs. fund group domicile I 10% III II I II IV III 26% 22% 5% 3% 1% +1% +3% +5% I III IV IV III III II Italy 5% 3% 1% +1% +3% +5% IV III II I UK III IV II I +10% +13% 2013 2012 2011 2010 2009 2008 2013 2012 2011 2010 2009 2008 France 5% 3% 1% +1% +3% +5% 6% Luxembourg 5% 3% 1% +1% +3% +5% +9% 6% Germany 5% 3% 1% +1% +3% +5% +7% 5% 3% 1% +1% +3% +5% 5% Europe Net sales as a % of AuM. Fund domicile (blue), fund group domicile (black). Est. on Efama, Assogestioni, ALFI, IFIA & BVI data. 36

Household saving rates in Europe 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Q4 0% EU avg Italy Germany France UK Gross household saving rates. Source: Eurostat. 38

How income & consumption Δ% affect saving rates 1.5% 1.0% consumption 0.5% 0.0% 16% 14% 12% 15.2% Italy 12.9% -0.5% 10% -1.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 8% 2009 2010 2011 2012 2013 Q4 income 2008Q4:2013Q4. Source: Eurostat. 39

How income & consumption Δ% affect saving rates 1.5% 1.0% 18% 17.4% consumption 0.5% 0.0% -0.5% 16% Germany 14% 12% 10% 18% 16% 15.3% 14% France 12% 16.2% 15.2% 10% -1.0% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2009 2010 2011 2012 2013 Q4 income 2008Q4:2013Q4. Source: Eurostat. 40

How income & consumption Δ% affect saving rates 1.5% 1.0% consumption 0.5% 0.0% -0.5% 8% 6% 4% 2.2% UK 8.2% 5.1% -1.0% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 2% 2009 2010 2011 2012 2013 Q4 income 2008Q4:2013Q4. Source: Eurostat. 41

Household financial portfolio breakdown Italy Total Asset bn Currency & deposits Total Bonds Issued by banks Total Stocks Listed Investment funds Pension funds & life pr 1995 1,796 38.3 22.8 2.1 19.3 1.6 5.8 8.8 2000 3,041 22.9 16.5 6.4 29.5 5.4 17.0 10.0 2005 3,713 24.6 19.8 7.4 25.3 2.5 11.5 14.7 2010 3,723 30.0 19.0 10.0 22.5 1.9 7.2 17.2 2011 3,557 31.5 20.1 10.6 19.4 1.7 6.6 18.0 High level of direct investment (~ 40%) Significant amounts of bank issued bonds (10%) Negligible level of listed shares. High level of unlisted ones. 2012 3,718 31.7 18.7 10.1 20.5 1.6 7.2 17.6 2013 Q3 3,713 32.1 16.9 9.1 20.7 1.5 8.2 18.0 France 4,427 29.5 1.4 n.a. 17.6 3.8 7.0 34.4 Germany 5,070 40.5 4.3 n.a. 9.4 n.a. 8.7 34.9 UK 5,738 28.2 0.7 n.a. 9.6 4.1 2.2 55.1 USA 47,312 12.8 8.4 n.a. 32.8 n.a. 11.4 31.8 Funds: rise until 1999 (18%) then fall (hump shaped) Pensions/life product: up but still too modest. %. Source: Eurostat, OECD, BCE, Deutsche Bundesbank. 42

Managed products in household portfolios Investment funds Pension funds & life products 20% 18% 16% 14% 12% 10% 8% abnormally high? 60% 50% 40% 30% 6% too low? 20% 4% 10% 2% 0% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Q3 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Q3 0% Italy France Germany United Kingdom USA Source: Eurostat, OECD, BCE, Deutsche Bundesbank. 43

Public Pensions (1st pillar) Cost (% GDP) Future substitution rates Age: 68 (70) + 38 (40)y of contrib. 80% 1 Private 3 2 70% sector employee 4 Today 60% Self employed 1 ante L 243/2004 2 ante DL 78/2010 50% 3 ante DL 98/2011 4 ante DL 201/2011 40% 2010 2020 2030 2040 2050 2060 Source: Ragioneria Generale dello Stato. 44

Private pension plans at a glance (2nd & 3rd pillar) (,000) 2008 Member breakdown 5,829 22,899 25% 21% Private sector employees 4,161 13,931 30% 26% Public sector employees 155 3,283 5% 4% Self employed 1,513 5,685 27% 19% (,000) % '12 % 4y % ( m) % GDP Vehicle breakdown 5,829 100% +5% +15% 104,401 6.7% 2012 Working pop. (est.) Membership rate 2012 Members Assets Contractual p.f. 1,970 34% 1% 3% 30,174 Open p.f. 914 16% +4% +11% 10,078 Ind. Insurance Plans (PIP) 2,312 39% +14% +49% 16,086 Ante 1993 p.f. ('pre existing') 660 11% 1% 2% 48,010 Membership rate Source: Covip, Istat, RGS. 45

2007 2 nd pillar reform: failure of automatic enrolment 13.7m 13.9m 312K 301K Not Enrolled Opt-Out 12.4m 1.2m 292K 17% 226K 16% 266K 7% 7% 4% 70% 30% 84% 15% 6% Enrolled 2.2m 4.2m Dec 2006 2007 2008 2009 2010 2011 2012 Dec 2012 New members: Automatic Enrolment Voluntary Enrolment Source: est. based on Covip data. 46

key figures 23 April 2014 Research Department