The Italian Asset Management market

key figures Research Department

1. Overview Open-end funds: AuM, flows & Asset classes Open-end funds: Distribution Mandates and the insurance market 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 2017: May 2018) % +9.3 2.6 +19.9 +2.5% 2,089 +4.4 4.1 +9.5 +0.1 +13.9 4.0 I :M4+M5 1.7% Perf. 2,065 1,944 993 Mand. +11.7 +16.2 +27.9 I +0.3 +14.0 +28.6 +23.3 +28.9 III II 51% 993 49% +17.3 Perf. IV 1,027 49% 51% 1,062 49% 51% 1,002 49% 51% 1,063 Funds 950 Dec 2016 Dec 2017 May 2018 AuM, net flows & performance, bn. 4

Net flows (monthly data) 25 20 15 10 5 0 5 10 bn Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2014 2015 2016 2017 2018 Net flows, bn. Monthly data. 5

Product breakdown +19.5 +8.7 2018 I +0.3 :M4+M5 +0.8 0.2 :M4+M5 +13.7 IV +0.4 2018 I +28.0 III 43 +0.5 +0.2 III IV 2017 II Open end Funds Retail Mandates (discretionary portfolios) +0.0 +0.3 IV +1.5 III +0.5 2018 I 1.1 :M4+M5 130 6% 4% 53 1,009 49% 3% 872 42% 2017 II +9.0 2.7 IV Closed end Funds Institutional Mandates +3.9 3.0 :M4+M5 2018 I 2017 II 1.2 2017 II III 6

Long term trend 200 2,065 2,050 150 100 50 +46 +20 +52 +19 +35 +26 +62 +133 +141 +56 +97 +10 1,850 1,650 0 50-41 -12 1,450 1,250 100-79 1,050 150 200 880-200 850 250 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 :M5 FUNDS MANDATES TOTAL AUM 650 Net flows, bn, yearly data. 7

Top 15 Groups AuM (May 2018) Net flows 2018 :M5 2017 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 0% 4% 8% 12% 16% 20% GENERALI EURIZON FIDEURAM AMUNDI ANIMA HOLDING POSTE ITALIANE BLACKROCK UBI BANCA ALLIANZ MEDIOLANUM AZIMUT AXA IM BNP PARIBAS JPMORGAN AM ARCA INVESCO bn 1% 2% 3% 4% 4% 5% 480 23% 308 15% 207 10% 61% 74% 83% 0 20 40 60 80 100 120 140 160 Funds n.a. +4.9 +4.7 6.0 +6.3% +4.4% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Mand. x%: Mkt share + n.a. Net sales as % AuM +12.5 0 2 4 6 8 10 +19.2 8

Dec 2014 683 29% 41% 30% Open-end funds: domicile breakdown Dec 2017 1,011 May 2018 1,009 43% 25% 31% 80 70 +44.7 2018 :May Domestic +2.2 Round Trip 0.0 True Cross Border +6.8 60 50 40 +24.3 +37.2 7 6 5 30 20 10 0 +20.3 +26.3 +23.5 +15.8 +8.8 +5.3 2015 2016 2017 +6.6 +3.0 +0.9 0.7 0.9 2018 I :M4+M5 + 0.2 4 3 2 1 1 AuM & net flows, bn. 10

Long term trend: open-end funds 100 +91 +94 +77 1,009 1,000 50 +30 +1 +21 +6 +1 +46 +34 +9 900 800-1 700 50 529-9 -52-33 43% 25% 31% 600 100 4% 20% 500 75% 400 150-144 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 :M5 Domestic Round Trip True Cross Border Total AuM 300 Net flows, bn, yearly data. 11

Top 15 Groups (open-end funds only) AuM (May 2018) Net flows 2018 :M5 2017 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 0% 4% 8% 12% 16% 20% EURIZON FIDEURAM AMUNDI 4% 159 16% 120 12% +4.3 +18.7 +9.4 ANIMA HOLDING 8% GENERALI +10.9 BLACKROCK MEDIOLANUM JPMORGAN AM 4% 5% 7% 54% n.a. +6.3% n.a. AZIMUT 3% UBI BANCA ARCA 72% INVESCO PICTET AM M&G INVESTMENTS FIDELITY MORGAN STANLEY 2% 83% n.a. Q1 +18.8% +3.7 +7.6% n.a. +53.5% +6.6 +18.3% bn 0 10 20 30 40 50 60 70 80 90 100 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Domestic Round Trip True Cross Border x%: Mkt share + 0 1 2 3 4 5 Net sales as % AuM 12

Asset Class breakdown TOTAL 22% 9% 3% 41% 25% DOMESTIC 8% 11% 1% 35% 43% 258 bn 27% ROUND TRIP 16% 6% 5% 47% 26% 300 bn 31% TRUE CROSS BORDER 34% 10% 40% 13% 417 bn 43% 0% 20% 40% 60% 80% 100% Equity Balanced Money Market Bond Flexible Hedge March 2018. 13

Equity & balanced funds AuM (March 2018) Net flows 2018 I 2017 0.0% 2.5% 5.0% 7.5% 10.0% 0% 5% 10% 15% 20% 25% 30% ITALY EURO AREA 5% 5% EUROPE 17% AMERICA 12% PACIFIC AREA 5% EMERGING MKTS 10% SPECIAL. COUNTRY 5% GLOBAL 24% SPECIAL. SECTOR 12% OTHER 4% BALANCED +4.7 +17.8 bn 0 10 20 30 40 50 60 70 80 90 100 0.0 0.5 1.0 1.5 2.0 0 1 2 3 4 5 6 Domestic Round Trip True Cross Border x%: Mkt share + Net sales as % AuM 14

Money mkt, Bond, Flex & Hedge funds AuM (March 2018) Net flows 2018 I 2017 0.0% 2.5% 5.0% 7.5% 10.0% 0.0% 10.0% 20.0% 30.0% MM FUNDS ITALY 1% EURO GOV. SHORT T. 5% EURO GOV. M/L TERM 7% EURO CORPORATE / HY 11% DOLLAR AREA 3% GLOBAL 7% EM 9% MIXED 20% SPECIALIZED 19% FLEX (BOND) 20% +19.5 FLEX 242 +8.5 +21.1 HEDGE bn 0 20 40 60 80 100 120 140 Domestic Round Trip True Cross Border x%: Mkt share 0 1 2 3 4 + 0 2 4 6 Net sales as % AuM 15

The Italian fund market is retail-oriented Open-end funds Direct holding DPM Unit Linked Institutional Retail investors End of 2016 data. 17

Banks dominate the retail fund distribution landscape (1) Financial Advisors Bank branches Total Top 5 groups Top 10 groups Top 5 groups Top 10 groups AuM of funds distributed to Italian retail clients (direct investment). End of 2016 data. 18

Banks dominate the retail fund distribution landscape (2) Italian ManGroups Banks Total Financial advisors Captive Dist. 93% Foreign ManGroups Banks Total Financial advisors 3 rd party Dist. 83% AuM of funds distributed to Italian retail clients (direct investment). End of 2016 data. 19

Banks: no more dependent on funding from retail investors... 30 20 10 0 10 20 30 40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Retail Bank Bonds Domestic and Round Trip Funds True Cross Border Quarterly flows, bn. Source: Assogestioni, Bank of Italy. 20

... and urged to sustain profitability through non interest-based sources of revenues 25 10 20 9.5 15 9 10 8.5 5 8 0 7.5 5 7 10 6.5 15 6 20 Q1 2009 Q2 Q3 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 5.5 Funds flows,captive Man.Cos. (l.) Net interest margin (r.) bn. Source: Assogestioni, bank balance sheets (Top 5 groups). 21

Distribution of 3 rd party funds: FAs more open than Banks... Banks Total FAs Distributors - Open Architecture level (3rd party fund incidence) End of 2016 data. ( bn) 22

The more open the distributor...... the higher the proportion of foreign ManGroups funds Italian ManGroups Total Foreign ManGroups Distributors - Open Architecture level (3rd party fund incidence) ( bn) End of 2016 data. 23

Regional breakdown (channels) Financial Advisors Bank branches Total Banks End of 2016 data. 24

Distinction by type of retail investors (1) Banks Total Financial advisors AuM of funds distributed to Italian retail clients (direct investment). End of 2016 data. 25

Distinction by type of retail investor (2) Italian ManGroups Mass-Affluent Banks Total FAs Private Foreign ManGroups Total AuM of funds distributed to italian retail clients (direct investment). End of 2016 data. 26

3 rd party funds: private segment more open than Mass Affluent Total Distributors - Open Architecture level (3rd party fund incidence) ( bn) End of 2016 data. 27

Regional breakdown (clients) Total 516 End of 2016 data. 28

Mandates: AuM & Net Sales trends AuM (March 2018) Net flows 2018 I 2017 0.0% 2.5% 5.0% 0.0% 3.0% 6.0% 9.0% 12.0% DISCRETIONARY MANDATES (GPF) 4% DISCRETIONARY MANDATES (GPM) 9% PENSION PLANS 9% INSURANCE PRODUCTS (TRADITIONAL) 626 61% INSURANCE PRODUCTS (UNIT & INDEX L ED) 9% OTHER 8% bn 0 20 40 60 80 100 Foreign Co. Domestic Co. x%: Mkt share 0.0 1.5 3.0 + 0 3 5 8 10 Net sales as % AuM 30

Top 15 Groups (mandates only) AuM (May 2018) Net flows 2018 :M5 2017 0% 2% 4% 6% 8% 0% 4% 8% 12% 16% 20% GENERALI 395 39% 4.7 EURIZON FIDEURAM AMUNDI POSTE ITALIANE ALLIANZ AXA IM UBI BANCA BNP PARIBAS BANCO BPM ANIMA HOLDING CREDIT SUISSE CREDITO EMILIANO AZIMUT GROUPAMA AM BLACKROCK bn 1% 2% 3% 4% 5% 149 15% 8% 90% 9% 79% 94% 0 10 20 30 40 50 60 70 80 90 Retail n.a. +3.6 +9.6% +10.9% 25.2% 3.5 0.0 0.5 1.0 1.5 2.0 Instit. x%: Mkt share + n.a. + 6.6 0 1 2 3 4 Net sales as % AuM 31

Insurance Mandates & Captive/Affiliated Insurers GENERALI INVESTMENTS GENERALI ASSICURAZIONI (Gr.) EURIZON CAPITAL / FIDEURAM INTESA SANPAOLO VITA (Gr.) POSTE ITALIANE POSTE VITA Italian Market: 35% 317 361 PIONEER INVESTMENTS UCB (JV AVIVA / ALLIANZ / CNP) ALLIANZ ALLIANZ ASS. (Gr.) Italian insurance market (Dec 2016) AXA AXA ASS. (Gr.) AMUNDI CREDIT AGRICOLE VITA BANCO POPOLARE BP (JV AVIPOP / POPOLARE VITA) 621 80% UBI BANCA UBI BANCA (JV AVIVA / LOMBARDA VITA) BNP PARIBAS BNPP CARDIF VITA bn 0 30 60 90 120 150 Mandates Technical Res. bn, December 2016. Source: Assogestioni, balance sheets. 32

Life Insurance Market: long-term trend Dec. 2004 Max Unit&Index l. March 2018 7% Funds 27% Bonds 66% Dec. 2016 Dec. 2002 Yearly net cash flows, bn. Source: Ania, Ivass. 33

Top 10 Life Insurance Groups Technical Reserves (Dec 2016) Flows 2016 2015 0 4 8 12 16 20 24 0 4 8 12 16 20 24 GENERALI INTESA SANPAOLO Generali Ass./Generali Italia/Alleanza Ass./BG Vita Intesa Sanpaolo Vita/Fideuram Vita POSTE ITALIANE 55% ALLIANZ UNIPOLSAI AVIVA Allianz/Creditras Vita Unipolsai/Popolare Vita/Bim Vita/Arca Vita 70% BNP PARIBAS AXA MEDIOLANUM CATTOLICA 85% bn 0 10 20 30 40 50 60 70 80 90 100 110 120 130 0 4 8 12 16 20 24 Class III (unit/index) x%: Mkt share Class I & Other + Net flows 0 4 8 12 16 20 24 Premiums 34

Top 10 Unit&Index Linked Groups Technical Reserves (Dec 2016) Flows 2016 2015 0 1 2 3 4 5 6 7 0 2 4 6 8 10 INTESA SANPAOLO Intesa Sanpaolo Vita/Fideuram Vita ALLIANZ MEDIOLANUM GENERALI OLD MUTUAL POSTE ITALIANE Allianz/Creditras Vita Generali Ass./Generali Italia/Alleanza/BG Vita 54% 71% CNP ASSURANCES AVIVA UNIPOLSAI AXA 90% bn 0 5 10 15 20 25 30 35 0 1 2 3 4 5 6 7 0 2 4 6 8 10 x%: Mkt share + Net flows Premiums 35

Net Assets by fund domicile 4,149 +0% +12% 1% +10% 15,541 2,034 +0% +8% 1,924 +0% +8% 1,608 2% +12% 2,416 +1% +15% 62% Ucits AIF 34% MM 38% 18Q1 17 Growth rate 93% Spezialf. 550 +0% +2% 316 1% +8% Germany 13% France 12% UK 10% Switzerland 4% Italy 2% Luxembourg 27% Ireland 16% Europe 100% 2018Q1 bn. Source: Efama, AFG, BVI. 42% 43% 37

Net sales by fund domicile Italy 8% 6% 4% 2% +0% +2% +4% +6% +8% France 8% 6% 4% 2% +0% +2% +4% +6% +8% Germany 8% 6% 4% 2% +0% +2% +4% +6% +8% IV I III IV III III I II +3 +16 +8 +5.4% 2018% 2017 2016 +11% 2015 2014 2013 +33 +49 +40 +32 +112 +110 UK 8% 6% 4% 2% +0% +2% +4% +6% +8% Luxembourg 8% 6% 4% 2% +0% +2% +4% +6% +8% Europe 8% 6% 4% 2% +0% +2% +4% +6% +8% IV I III II III IV III I +10 +4 2018 +64 2017 2016 2015 2014 2013 +77 +308 +99 +10% +222 +942 +455 Net sales as a % of AuM. Yearly data in bn. Source: Efama, BVI. 38

Net Assets by fund domicile Long-term growth 350 300 250 200 150 100 Ireland Luxembourg UK France Germany Italy 50 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 Index values. Source: Efama. 39

Net Assets by fund group domicile 4,149 +0% +12% 1% +10% 15,541 1% 63% 2,691 +0% +9% Exp 10% 2,303 +0% +8% 3,078 +12% Exp > 90% 2,416 +1% +15% 62% Domestic Funds Ucits Domestic Funds AIF 1,154 +0% +11% 726 1% +9% 37% 38% Luxembourg Funds Irish Funds 18 Q1 Growth rate 17 Germany 24% France 16% UK 48% Switzerland 52% Italy 56% Luxembourg Ireland Europe 2018Q1. bn. Foreign (Round-trip) share in %. Est. on Efama, Assogestioni, ALFI & IFIA data. 40

Household saving rates in Europe 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Q4 0% EU avg Italy Germany France UK Gross household saving rates. Source: Eurostat, ONS. 42

Household financial portfolio breakdown Total Issued by banks Total Listed Italy bn % % % % % % % 1995 1,809 38.0% 22.5% 1.9% 19.2% 2.8% 5.8% 9.3% 2000 3,059 22.8% 16.5% 6.3% 29.3% 5.4% 16.9% 10.5% 2005 3,898 23.4% 18.9% 7.0% 28.0% 2.4% 10.9% 14.8% 2010 3,685 30.4% 19.7% 10.0% 19.9% 2.0% 7.6% 18.0% 2014 4,076 30.6% 12.6% 6.1% 23.0% 1.6% 10.1% 19.4% 2016 4,235 31.4% 8.6% 3.2% 23.3% 1.3% 11.2% 21.3% 2017 4,407 30.9% 6.9% 2.0% 24.1% 1.3% 12.2% 21.9% 2017 Total Asset Currency & deposits Bonds Stocks Investment funds Pension funds & life pr France 5,389 27.8% 1.1% n.a. 22.4% 5.2% 6.0% 35.8% Germany 6,042 39.3% 2.6% n.a. 10.9% 5.6% 10.8% 30.2% UK 7,489 24.2% 0.4% n.a. 11.3% 4.2% 4.9% 54.7% USA 67,035 12.9% 4.9% n.a. 36.7% n.a. 12.1% 31.4% %. Source: Eurostat, OECD, BCE, Deutsche Bundesbank. High level of direct investment (~ 30%) Decreasing amounts of bank issued bonds (2.0%) Negligible level of listed shares. High level of unlisted ones. Funds: rise until 1999 (18%) then down, then again up. Pensions/life product: up but still too modest. 43

Managed products in household portfolios Investment funds Pension funds & life products 20% 18% 16% 14% 12% 10% 8% abnormally high? 70% 60% 50% 40% 30% 6% 4% 2% 0% too low? 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 20% 10% 0% Italy France Germany United Kingdom USA Source: Eurostat, OECD, BCE, Deutsche Bundesbank. 44

key figures Research Department