Algebris Meets Investors In Italian Insurer Fight

Oct 29 2007 | 11:56am ET

The battle over Europe’s third largest insurer is taking shape this week, as activist hedge fund Algebris Investments begins to meet with other Assicurazioni Generali shareholders while Generali’s board meets on Wednesday.

London-based Algebris, which owns 0.3% of Generali but said it could raise its stake to 1%, today began meeting with investor groups interested in its proposals to improve governance and shareholder returns at the Trieste-based insurance giant, Italy’s largest. There are reportedly more than 20 such groups that have contacted Algebris, though it is unclear how many shares in the insurer they represent.

Last week, Algebris sent a letter to Generali’s board complaining about the firm’s poor performance, charging that it underperforms its larger rivals Allianz and Axa. According to Algebris, Generali achieves only 60% of its potential earnings. The hedge fund demanded “more robust corporate governance” and that the company split the CEO’s job and the chairmanship.

Algebris’ prospects are still somewhat uncertain. It needs the support of shareholders representing just 2.5% of Generali to forward motions at April’s annual meeting, and 10% to call an extraordinary meeting. Trading volume in Generali shares soared fourfold in the last three trading days, during which upwards of 8% of the company’s shares may have changed hands.

But Mediobanca, the investment bank that is Generali’s largest shareholder with a 16% stake, threw its support behind Generali management. It did say, however, that it would hear discussion on new corporate governance initiatives at the insurer.


In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...

 

From the current issue of