Shareholdings of Alternative Investment Funds in Listed Companies and in Banks. A Legal Perspective

50 Pages Posted: 28 Sep 2018

See all articles by Simone Alvaro

Simone Alvaro

CONSOB (Commissione Nazionale per le Società e la Borsa)

Filippo Annunziata

Bocconi University - Department of Law; European Banking Institute; Ca Foscari University of Venice; Bocconi University - Baffi Carefin Centre; Frankfurt School of Finance & Management; EUSFIL Jean Monnet Centre of Excellence

Date Written: September 24, 2018

Abstract

The harmonization of the European regulations on collective investment schemes (CIS) – with UCITS regulation first and, most recently, with the AIFM Directive - has expanded the areas of operation of asset managers. In particular, Alternative Investment Funds are emerging as increasingly relevant shareholders in listed companies and banks. In light of such market development, the paper explores the interaction of CIS regulation with corporate governance regulation and prudential supervision rules. First, the paper shows that the application of takeover rules to CIS as shareholders raises significant complexities. These complexities derive from the fact that the Italian law on listed issuers (takeovers, disclosure of significant shareholdings, groups and conflict of interest, slate voting, etc.) implicitly assumes that shareholders are mainly individuals or joint-stock companies rather than funds managed by a third party. Second, the paper discusses the issues posed by the acquisition of qualifying shareholdings in the capital of banks by CIS in the perspective of the compliance with micro-stability rules. The paper argues that the typical objectives of CIS regulations, in terms of transparency, fairness of conducts and the duty to serve at best CIS investors, may trade off with the need to ensure compliance with prudential rules for the invested company. More specifically, though the investment policies of CIS are obviously targeted to the search of the specific risk-return profile declared in the fund prospectus, the need to take into account further interests, such as stability and sound and prudent management of the invested banks, may not necessarily be in the best interest of CIS investors.

The papers are presented in their original Italian version, along with a shorter English version, that is intended to target foreign audiences, so that they may better contribute to the international debate.

Keywords: Alternative Investment Funds - Collective investment schemes – Listed companies

JEL Classification: K2, G1

Suggested Citation

Alvaro, Simone and Annunziata, Filippo and Annunziata, Filippo, Shareholdings of Alternative Investment Funds in Listed Companies and in Banks. A Legal Perspective (September 24, 2018). CONSOB Legal Research Papers (Quaderni Giuridici) no. 17, Available at SSRN: https://ssrn.com/abstract=3253177 or http://dx.doi.org/10.2139/ssrn.3253177

Simone Alvaro (Contact Author)

CONSOB (Commissione Nazionale per le Società e la Borsa) ( email )

Roma 00198
Italy

Filippo Annunziata

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, Milan 20136
Italy

European Banking Institute ( email )

Frankfurt
Germany

HOME PAGE: http://ebi-europa.eu/bodies-of-ebi/academic-board/

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Bocconi University - Baffi Carefin Centre ( email )

Via Roentgen 1
Milan
Italy

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

EUSFIL Jean Monnet Centre of Excellence ( email )

Italy

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