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Western EuropeJune 5 2005

Italians hedge bets with upmarket fund

Italian banking may be looking slightly tarnished and inward-looking after the Antonveneta affair (see article on Italy), but away from the limelight individual Italian banks are advancing their international presence.
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Banca Monte dei Paschi di Siena (BMPS), for example, is not allowing its moniker as ‘the world’s oldest bank’ to keep it at a standstill. Recently it invested in a new upmarket, London-based hedge fund, TrinityCapM.

TrinityCapM looks to have all the features that a classy fund should have: rocket scientists as founders; Nobel prize winners as advisers; blue chip backers and investors. (The LTCM saga proves that it is not always a recipe for success, but perhaps it is rather tactless to mention this.)

The founders of TrinityCapM are bankers who developed advanced value-at-risk methodology for JPMorgan Research and then applied it at Smith Barney in the late 1990s.

The advisers are Professor Lawrence Klein, the octogenarian American academic who won the Nobel Prize in 1980 for his work on business cycles, and Dr Andrew Rudd, co-founder of BARRA, the financial modelling firm.

The investors are central banks and supranationals and the backer is Monti dei Paschi, which traces its history right back to 1472. For history buffs that’s just 16 years after Gutenberg published his first Bible and two decades before Columbus reached America.

But for all its good works, Monti cannot remain entirely immune from the fracas in Italy. Deputy chairman Stefano Bellaveglia told me at the TrinityCapM launch in the sumptuous surroundings of the Italian embassy: “I don’t see anything wrong in having foreign equity in Italian banks.”

As The Banker went to press, rumours were flying that BMPS was going to sell its 4.4% stake in Banca Nazionale del Lavoro to BBVA, thus proving the point. And BPMS’s new CEO was said to be none other than Pietro Montani from Antonveneta, which is a shrewd move because he is a noted cost cutter.

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