Italy's insurance regulator IVASS is seeking more information regarding internal control and governance systems as it reviews Generali's proposed asset management partnership with French bank BPCE, according to two sources familiar with the situation.
Generali, Europe's fourth-largest insurer, signed an agreement with BPCE in January to merge their respective investment units, Generali Investments Holding (GIH) and Natixis Investment Managers. This collaboration would create Europe's largest fund manager by revenue and the second-largest by assets under management.
The European fund industry has been hindered by fragmentation, as many players lack the global scale needed to compete with U.S. firms. The proposed deal has sparked criticism from some sectors in Italy, where the conservative government aims to keep savings domestically to assist in managing one of the world’s largest debt burdens. The government must approve the deal, ensuring that Generali retains full control over the allocation of savings collected in Italy.
Sources indicated that IVASS requires additional time to complete its review and is requesting clarity on the new entity’s portfolio remuneration system. Both IVASS and Generali have declined to comment on the matter.
The uncertainty of the deal's finalization has been compounded by Generali CEO Philippe Donnet's bid for reappointment this month amid shareholder disputes. The ultimate decision will be made by the new Generali board, which shareholders will elect on April 24. Three candidate slates for the board position have been submitted, raising the possibility of complications during the vote.
Under Italian legislation designed to protect assets of strategic national importance, the government can impose conditions on such agreements. Generali's second- and third-largest shareholders, including the investment vehicle of late Ray-Ban billionaire Leonardo Del Vecchio and real estate magnate Francesco Gaetano Caltagirone, have expressed skepticism about the transaction.
Donnet has stated that the governmental review will help address any concerns regarding the deal. Both Generali and BPCE have assured that they will maintain decision-making authority over their respective asset allocations while pooling management in a joint venture, with each unit holding a 50% stake.
To further alleviate concerns from Rome, Generali has clarified that the deal structure separates asset ownership from asset management. Donnet has also emphasized the potential for increased Italian debt holdings. Under pressure to enhance Generali's deal-making capacity, Donnet has expanded the insurer’s asset management operations, first by acquiring Conning Holdings, a U.S.-based asset manager specializing in insurers, and subsequently engaging with BPCE, which was seeking a partner for Natixis.