Ugo Loeser is the CEO of Arca Fondi SGR, a mid-sized active asset management company based in Milan. Founded almost 40 years ago to serve the typical Italian saver with a basic understanding of finance and a low-risk propensity, Arca Fondi SGR specialises in long-term investing. Today, Arca manages mutual funds, pension funds and institutional accounts, reaching more than 100 banks and financial institutions and serving over 800,000 clients. Ugo recently told Wanda Rich, editor of Global Banking & Finance Review, about the strides Arca has made in ESG products such as Arca Oxygen Plus, innovative product creation, and tech advances that improve access to the services its clients need.

How has Arca Fondi SGR developed over the years?

Our solutions aim to produce a high return in the long run without making our customers put too much money at risk at any single moment. This strategy continues to pay off as our clients and their banks are very strongly tied to Arca and its products. Nowadays, we manage more than €35 billion in a wide range of funds as we continue to innovate in a few high-conviction themes.

ESG (Environmental, Social and Governance) investing is now a priority for Arca Fondi SGR. Can you tell us about Arca Fondi SGR’s proprietary ESG Rating Model?

We developed our own proprietary ESG scoring by using alternative data – for example, company surveys – to assign a rating to almost every company we invest in. With the assigned scores, we are able to determine whether each company has a good or bad ESG rating, and we commit to invest only in stocks that come from companies which rank in the top three ratings. Moreover, we apply the usual exclusion criteria, like staying out of dangerous, socially unequal and/or polluting businesses.

Arca Fondi SGR is at the forefront of innovative product creation. Are there any products you are most proud of? Will you be launching any new products this year?

We are proud to say that we still manage two of our funds that were created almost 40 years ago, in 1984 when Arca SGR was born. Nonetheless, we innovate every year when we see serious trends that can match our customers’ needs. For example, during the last few years our best success came by being among the first to create tax-exempt ‘PIR’ funds; as of now, we possess a 12% market share. Also, we innovate products and services linked to our award-winning open-ended pension fund, ‘Arca Previdenza,’ the first pension fund in Italy with more than €4.5 billion AUM. Lastly, we entered the ESG space with a few ‘Art. 9’ funds, the most successful of which so far has been Arca Oxygen Plus.

Can you tell us about the Arca Oxygen Plus project?

With Arca Oxygen Plus, we have coupled the offer of a balanced ESG (SFDR Art. 9) fund with the possibility of giving a tangible sign of the importance of moving resources towards strongly reducing CO2 emissions. The fund invests in companies which aim to reduce emissions, while Arca Fondi is planting around 12,000 new trees in many Italian regions as a side part of the project. We invite our network banks and clients to these events so they can see how asset management is helping to transform our planet into a more sustainable one.

How does Arca Fondi SGR use technology to enhance services
and efficiency?

In the past few years we have invested a lot of resources into technology, and this is starting to pay off. Digital access and services are our priority; our website, along with customers’ and distributors’ reserved areas, has recently been completely redesigned to offer a smooth, easy but also complete navigation experience. Customers can find what they need in a few clicks. New customers can learn how to invest and easily find a consultant within our banks’ network. All of the collected data is analysed and reported to adapt our communication to our customers’ needs. An additional important result is having significantly decreased the amount of paper at home and in branches of the banks that work with us.

What are the key asset management trends you foresee for 2022?

Unfortunately, it is very easy to identify the key challenges and trends for 2022: inflation, rates and geopolitical risk. All of a sudden, after a successful recovery from the 2020 pandemic crisis, asset managers must face some big challenges they have not had for a very long time. However, as always, I am sure we will protect our clients’ wealth and find investing opportunities, even in this complex scenario.