Co-founder of Affari Miei Independent Financial Advisory Company
November 20, 2023
If you are looking for information on Milan Private Markets Italy II because it was proposed to you by your consultant or because you are interested in mutual funds and want more information, all you have to do is continue reading.
Today we will analyze the fund proposed by bank of Milan trying to discover all his characteristics and his costsand then move on to drawing the conclusions that make you think and that can somehow direct you towards the best solution for you.
Enjoy the reading!
This article talks about:
Banca Mediolanum: Two words
The bank is based in Basiglio, Milan, and is the parent company of Mediolanum Banking Group.
The group controls the product companies in the three business sectors, namely banking, insurance and managed savings.
The company is also listed on the Milan Stock Exchange.
The bank’s mission is to build a better world every day, for people and for the planet.
One of their objectives is undoubtedly to provide unique personalized consultancy, with effective solutions that cover the entire lifespan of people.
As I told you at the beginning, Banca Mediolanum’s offering is truly broad, since it is able to offer its customers personalized solutions designed to satisfy all customer needs.
The characteristics of Mediolanum Private Markets Italia II
Milan Private Markets Italy II is designed to offer investors a long-term investment through which they can also benefit from tax breaks for alternative PIRs.
This fund pays attention to Italian production system and the entrepreneurial stories that distinguish it. In this way you will be able to support the country’s economy, seizing the important opportunities offered by the world of private assets.
The fund is a closed, non-reserved alternative investment fund under Italian law which qualifies as a Feeder fund and which invests at least 85% of its assets in the Master fund called ECRA Private Markets Italia II, managed by Eurizon Capital Real Asset .
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What do you invest in?
The fund invests in private asset.
What are? These are those businesses that are not listed on the stock exchange, but which are owned directly by the owner or family or by a company.
These create added value for the investor portfolio in two basic ways:
Allowing access to exclusive investment opportunities, not available on public markets and not accessible to ordinary investors; By presenting an interesting risk profile and being subject to lower volatility, they can offer greater decorrelation.
The Fund invests at least85% of its assets in the units of the non-reserved closed-end Italian alternative investment fund (FIA) called “ECRA Private Markets Italia” II (“Master Fund”) managed by Eurizon Capital Real Asset SGR SpA, therefore qualifying as a Feeder Fund.
The opportunities offered by the fund
This particular fund allows you to invest in the potential of small and medium-sized enterprises which represent the backbone of the Italian production system. It also offers access to new markets and private asset investment opportunities, as we have seen.
Risk profile
The fund has a risk profile of 6 on a scale ranging from 1 to 7. We are faced with a very high risk, therefore only suitable for aware and capable investors capable of withstanding market fluctuations and various upheavals .
Method of subscription and use of proceeds
L’minimum investment and subsequent ones in the L share class are €25,000 and the duration of the fund is 10 years. The membership method is a single payment (PIC).
The amounts allocated to the individual long-term savings plan cannot exceed, for each calendar year, 300,000 Euros per year and a total of 1,500,000 Euros.
The amounts allocated to the Individual Long-Term Savings Plan (PIR) by each individual natural person participant cannot exceed, for each calendar year, €40,000 and a total of €200,000.
The fund has a dividend policy distributiontherefore it allows the proceeds to be distributed and, at the end of the 5-year investment period of the Master fund, partial capital reimbursements may also be arranged by the SGR.
The closed-end form of the fund, which characterizes it as illiquid, means that the reimbursement of units to participants occurs only on the expiry date of the Fund, the duration of which is 10 years.
Costs
The important part to consider is that of costs.
For this fund you will have to bear 1% of the investment amount at the time of subscription as entry feewhile you won’t have to pay any exit fee.
As regards i management coststhey stand at 1.25% of the value of the investment per year.
However, performance fees do not apply.
Tax regime
We said before that one of the advantages of investing in this fund is related to taxation.
A substitute tax of 26% is applied to the amount of distributed proceeds and to the difference between the liquidation value and the subscription value (12.50% on the portion of proceeds referable to bonds and other public debt securities and Italian and foreign securities comparable to them as well as bonds issued by countries forming part of the so-called white list).
This is regarding the proceeds.
Since the fund is among the qualified investments intended for individual long-term savings plans and specialized in small and medium-sized businesses, such as Alternative PIRsthen they are not subject to taxation income relating to shares held by natural persons fiscally resident in the territory of the Italian State, in the context of an Alternative PIR outside the exercise of a commercial business activity.
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Affari Miei’s opinions on Mediolanum Private Markets Italia II
We have analyzed the fund proposed by in detail Mediolanumand now we can try to draw some conclusions.
This is an interesting and particular solution aimed at supporting small and medium-sized Italian businesses, which also allows them to benefit from the tax breaks provided for alternative PIRs.
However up here My business we are not huge supporters of mutual funds.
In fact, right now I’m talking to you about funds in generalnot just those from Mediolanum.
My speech focuses on the doubts that these funds have always raised in me, starting from the lack of transparency of the investment itself, up to the often high management costs that impact the returns obtained.
Not knowing you, I can’t dare say whether this is a suitable investment for you or not, but I can try to make you think.
Here you will find a reflection on mutual funds.
If you’re not entirely convinced of what I’m telling you, I recommend you download our free report in which we explain in detail the critical issues of actively managed mutual funds.
In our strategy we prefer other types of funds, such as ETFs. Not only do they offer significantly lower costs, but they are listed on the stock exchange and do not involve any conflict of interest. They also simply replicate an index rather than try to beat it, which offers much greater transparency in terms of which instruments managers can purchase.
Finally, the advice that we tend to give more and more often to people who are approaching the world of investments is that of study and train yourself, since without knowledge and awareness you don’t go anywhere, in every area of life, as well as in that of investments.
Studying is the starting point to begin your personal and financial growth, and to become aware of your means.
In fact, once you have identified your strategy and your objectives, it will be easier to invest as best as possible and seize the best opportunities from the markets.
Before saying goodbye, I’ll leave you some guide which may be useful to you:
Happy continuation on Affari Miei!
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