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

Creating An Offshore Hedge Fund Dream Team: The Seven Key Players

Jun 26 2015 | 6:47am ET

If you want to set up an offshore hedge fund, like any great team, you’re only...

Lifestyle

Hedgies Set to Compete in Wall Street Decathlon

Jun 8 2015 | 12:37am ET

The Wall Street Decathlon — a 10-event physical challenge that will crown “Wall...

Guest Contributor

6 Essential Principles To Balance Your Investment Risk

Jun 26 2015 | 10:07am ET

In this article, financial expert Greg Silberman explores how to hedge a private...

 

Editor's Note