Generali creates new asset manager with $4bn capital led by ex-AllianceBernstein boss

Italian insurer Assicurazioni Generali has launched a new asset management company headquartered in New York City that it claims will have a "disruptive revenue model".

The new company, which is formed in partnership with Aperture Investors, will be led by Peter Kraus, the former chairman and CEO of AllianceBernstein (AB) and global co-head of Goldman Sachs’ investment management division.

Generali said it will contribute up to $4 billion of strategic investment capital for individual investment strategies.

“Asset management is an industry long overdue for disruption," Kraus, chairman and CEO of Aperture, commented. "There are currently too many active managers managing too much money. Fixed fees and a lack of real capacity constraints have long incentivized managers to grow assets under management rather than pursue outperformance.

"This structure has led to years of poor performance that has eroded client trust in active management. We intend to change this by aligning manager and client incentives around outperformance. We do this by charging fees that are similar to passive ETFs when performance is at or below a stated benchmark - and we only charge more when we generate outperformance."

Kraus added: "It’s our belief that investors would rather pay for performance than pay regardless of whether or not they get any, and the only way to do that is to disrupt the long-held model of fixed fees based on AUM in asset management.”

Tim Ryan, CEO of Generali Asset Management, said: “Aperture Investors is another important milestone in Generali's multi-boutique strategy launched last year. We believe that innovation is not only a key lever for our long-term success but also an opportunity for Generali to guide the process of change as a leader in the insurance and financial industry. Aperture Investors offers us the ability to develop a new model that addresses manager incentives while also leveraging invaluable know-how in our sector.”

Carlo Trabattoni, head of Generali Investments Partners, added: “Peter Kraus has a 20-year history of successfully leading global financial organizations and the ability to inspire and attract talent eager to transform the business of asset management. The total AUM in the world amounts to well over $ 84 trillion, many active managers are underperforming and passive indexing is growing. With Aperture, we want to combine the interest for passive with the need for active.”

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