Although foreign sub-advisers are losing business to local in-house expertise, reflecting the growing maturity of Italy’s hedge fund industry, they still have a role to play
Among the various peculiarities that characterise Italy’s funds of hedge funds, the widespread use of foreign sub-advisers is undoubtedly one of the most prominent. The practice extends back to the earliest days of the industry and, while it has been declining in recent years, it still plays an important role for certain firms. Indeed, for international equities, even Italian mutual fund companies have historically hired foreign sub-advisers.
The roster of sub-advisers includes some of the best-known names in global hedge fund management. Also, the advisory business is highly concentrated with the top five advisers: Union Bancaire Privée, FIM Advisers, Tarchon Capital Management, Ivy Asset Management and HSBC, taking a combined market share of around 85%. UBP alone accounts for over...