During 2019, Banca Generali placed a structured product with an underlying $67 million (€60 million) in medium/long-term loans to approximately 450 Italian SMEs. The money were offered on the Credimi platform, the startup that developed the eponymous platform for the financing of invoices and which has reached $825 million (€742.7 million) in cumulative terms since the start of operations, of which $540 million (€486 million) in 2019 alone.
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Alternative investment strategies
Claudia Vacanti, Banca Generali’s product manager, explained that “the initiative is part of the investment proposal for alternative strategies that Banca Generali offers its professional clients, with a view to diversifying the portfolio, at a time when opportunities to make savings yield are rare and investors are looking for positive real returns to complement traditional investments. Alternative investment strategies meet this need and are also useful for the growth of the real economy, an issue to which investors are particularly sensitive.”
The target of $67 million (€60 million) disbursement through the platform was already announced last July, on the occasion of the first tranche of securitization of a loan portfolio with a gross value of $14 million (€13 million) originated as part of the Credimi Futuro initiative.
The product is an unsecured loan with a duration of 5 years (one of which is a pre-amortization loan), whose investigation is processed by Credimi’s artificial intelligence algorithms and whose disbursement is subject to the resolution of the Guarantee Fund for SMEs. It does not require any issue of guarantees on movable or immovable property, commercial credits or personal guarantees, and does not provide for restrictions on use. Credimi Futuro is reserved for SMEs with less than 250 employees, turnover between $277,790 to $55 million (€250,000 and €50 million) and at least 2 deposited balance sheets.
Floating rate coupon from Banca Generali
The product offered to Banca Generali’s professional customers said Vacanti, “offers an expected floating rate coupon equal to the 3-month Euribor plus 500 basis points. Expected because it is always necessary to take into account the fact that there is a probability of default on certain positions, even though the underlying loans are more than 70% guaranteed by the Central Guarantee Fund.” This is an interesting risk/return profile that increases the efficiency of the portfolio.
It is for this reason, added Vacanti, “that Banca Generali has included in its offer a series of alternative products for its professional private clients, who can choose to purchase these products as part of an administered custody account under advanced advice or to access multi-line asset management, baptized BG Next, in which other alternative products are also included, such as securitizations of health credits or letters of credit insured by export credit agency, and where there is also a Sicav that focuses on real estate strategies.”
Banca Generali is currently studying with Credimi a new investment commitment for medium/long-term loans to SMEs, again for a product to offer to its professional customers. In any case, already in this first part of the year, the Credito Futuro product gave rise to another $17 million (€15 million) in loans that have been securitized. Banca Generali, through its Luxembourg platform, has supported Credimi since the beginning of its activity in the purchase of securitization notes for commercial invoices issued by SMEs and offered on the platform. The ABS securities issued by the Lumen SPV are in fact always subscribed by BG Fund Management Luxembourg SA (Banca Generali Group) and the funds of Anthilia Capital Partners Sgr, Anima Sgr, Tikehau Capital and Banca Sella.
Financial innovation and training
Banca Generali is paying close attention to financial innovation. At the beginning of the month, it inaugurated its new center dedicated to training and innovation in private banking, called BG Training & Innovation Hub, the new point of reference for Banca del Leone’s private bankers to discuss the evolution of consulting services and develop new investment solutions together with its asset management partners.
Conceived as a laboratory to explore new proposals in the private banking sphere, the Hub will also be the cradle to conceive the new tools related to the contribution of investments towards the real economy in the distinctive BG4Real project, which will start from the beginning of the second quarter of 2020.
The CEO and General Manager of Banca Generali, Gian Maria Mossa, commented: “The evolution of fintech and the dynamics of zero interest markets are accelerating the supply revolution in the world of savings and private banking.”
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First published in BeBeez, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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