M&G: “It’s time to focus on private markets”

Going beyond traditional visions, in search of unexpressed potential in asset classes and geographies. This is one of the messages that emerged during the Media Day organized by M&G Investments in London to outline the strategies and prospects of the asset manager.

Passing the baton between the two sides of the ocean

The tariff policies adopted by Washington and the continuous changes of direction of the Trump administration are favoring a shift of investments towards Europe, underlined Andrea Rossi, group ceo of M&G , Italian father and Swedish mother. In particular, Trump moved on the path of duties convinced that this choice would have increased revenues significantly, which, combined with a reduction in public spending, would have allowed him to cut taxes.

However, according to the experts of the British asset manager, “the most likely outcome of Trump’s protectionist policies is that they call into question the sustainability of US public debt”. Moreover, the uncertainty has led to a reduction in demand for US assets and a significant weakening of the dollar, as well as an increase in US government yields, which leads to higher interest expenses for America. Germany is moving in the opposite direction. The new chancellor, Friedrich Merz , has used the relatively low cost of borrowing to finance a €500 billion infrastructure investment plan, as well as removing the so-called “debt brake” to increase defense spending. After years of financial probity, Germany is one of the few nations that has the opportunity to spend more and invest in growth.

Italy is no longer the Cinderella of Europe

Rossi stressed that the Old Continent (and, in particular, Germany) is experiencing a Renaissance phase , with higher margins and more robust growth than other areas of the world, particularly the United States where the private asset market is already more mature.

“In this scenario,” Rossi added, “Italy has stopped being considered a weak link, thanks to its institutional stability and the attention paid to public finances.” Furthermore, an interest in sustainable investments and critical infrastructures has been confirmed – even if the topic seems to have disappeared from the priorities of financial communication in recent times – in a global context that is still uncertain from a political and economic point of view.

Private assets the new frontier

For the British group, the emerging frontier of investments is that of private assets , a category that includes all areas of the unlisted, from private equity to private debt, from real estate to infrastructure. M&G currently manages around 90 billion euros in private assets. “These sectors are set to benefit from the major European plans for the energy transition and the strengthening of defense,” underlined Joseph Pinto, CEO of M&G Investments , who highlighted how European banks are gradually withdrawing from their role as the main financiers of the real economy, leaving room for savings managers to take on a leading role in the allocation of capital towards the productive economy. “The conditions are in place to mobilize significant shares of European savings towards real and productive assets,” added Pinto .

“The great challenge we face is to make private markets accessible to retail clients too,” added Micaela Forelli, CEO of M&G Europe Asset Management Operations . Thanks to the launch of its Eltif 2.0 that invests in private credit (European Long-Term Investment Funds), long-term funds that comply with EU regulations on investment protection, the British asset manager has already raised almost one billion euros and is committed to promoting the democratization of private markets to break down access barriers. Forelli also expressed the hope that by 2030 the huge wealth currently blocked in current accounts will be channeled into productive investments, for example supplementary pension solutions.

Integration between management and insurance

In light of this scenario, M&G has adopted an integrated model that combines asset management and insurance, which allows it – among other things – to co-invest with clients , strengthening trust.

Rossi then highlighted the strategic importance of the partnership recently signed between M&G and the Japanese insurance company Dai-ichi Life , confirming the validity of M&G's business model. "There is an Asian interest in European assets, although often underestimated. Our collaboration with Dai-ichi opens new doors for us".

The challenge of financial education

Rossi highlighted how too much liquidity is still parked in European retail accounts . A change in mentality is needed – the manager explained – that promotes financial education and also allows small savers to access alternative assets, perhaps through more liquid and diversified vehicles than those currently sustainable. In this sense, the United Kingdom represents a model: thanks to Individual Saving Accounts (ISAS), instruments similar to the Italian PIR but more flexible, over 22 million British citizens invest efficiently and without time or geographical constraints. The success of ISAS, which allow tax-free investments of up to 20 thousand pounds per year, demonstrates how simple and flexible instruments can encourage long-term savings, it was recalled.

M&G has chosen Italy to launch the Credit Academy , a training program aimed at consultants of partner distribution networks, with the aim of raising awareness of the opportunities offered by private debt for Italian bond investors. The demand for training on these topics is growing rapidly and M&G is committed to engaging with regulatory authorities to promote education, early financial planning and access to stable and long-term investment solutions.