Business World

Sunday 20 August 2017

Mediolanum in talks over fee concerns

Silvio Berlusconi is a Mediolanum shareholder. Photo: Reuters
Silvio Berlusconi is a Mediolanum shareholder. Photo: Reuters

Simon Rowe

Italian banking giant Mediolanum is in talks with the Central Bank over performance fees it charges clients of its Irish-based funds after concerns were raised by investors.

The bank's Irish-domiciled funds use a fee structure that is not allowed in Italy, and is out of line with the Irish financial regulator's own investor guidelines, which are non-binding.

Shares in the investment bank fell sharply earlier this week after the firm said a review of fee structures at its Irish-based funds would put 2018 profits and dividends at risk. The company said the review would most likely result in a 35 basis points decrease in performance fees.

The Irish arm of the Italian investment bank generated fee income of €26.5m and increased its headcount by 25pc last year, according to filings.

Dublin-based Mediolanum Asset Management has €34bn under management and posted post-tax profits of €16.6m for the year ending December 2015.

Mediolanum, which counts former Italian premier Silvio Berlusconi among its largest shareholders, settled a dispute with Italy's tax authorities linked to its Irish affiliates in 2015.

Last year, Mediolanum CEO Massimo Doris said Mediolanum planned to review the fee structure of its Irish-domiciled funds, bringing them in line with the guidelines of the Central Bank of Ireland and other international standards.

Doris said that the bank's fee structure was "perfectly legal" and that the Irish central bank had approved its funds.

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