Italian insurance company Assicurazioni Generali has launched Aperture Investors, a new asset management company with headquarters in New York City, US.

PI 15b

Image: Generali’s Rome building. Photo: Courtesy of Fotottica Randazzo/Assicurazioni Generali S.p.A.

The new asset management company has a disruptive revenue model led by Peter Kraus, the former chairman and CEO of AllianceBernstein (AB) and global co-head of Goldman Sachs’ investment management division.

Generali will contribute up to $4bn of investment capital for individual investment strategies, subject to the approval from its board of directors and Aperture Investors.

Aperture Investors will follow a revenue model where ETF-like fees will be charged, which can only go higher when managers beat their benchmarks.

Managers will be paid modest base compensation and can earn more when they ‘generate outperformance’. This is claimed to be a departure from the traditional fixed-fee structure, where managers charge fees based on the volume of assets managed.

Furthermore, a deferral mechanism will provide for unearned compensation to be returned to Aperture Investors’ clients ensuring that the profitability of the firm is dependent on whether or not its clients receive returns in excess of benchmarks over the long run.

Generali asset management CEO Tim Ryan 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.”

Aperture Investors chairman and CEO Peter Kraus said: “Asset management is an industry long overdue for disruption. 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.”

Generali develops simple, integrated, customized and competitive life and the property&casualty insurance solutions for its clients.