Funds affiliated with China’s central bank have bought a minority stake in Mediobanca, Italy’s pre-eminent investment bank, highlighting China’s willingness to place a long-term bet on the eurozone’s troubled periphery.
The disclosure that the People’s Bank of China had taken a 2.001 per cent stake in the Italian lender this month was made in a note by the Italian stock market regulator yesterday.
It marks the latest foray into the eurozone’s third-largest economy by the central bank’s investment arm, the State Administration of Foreign Exchange (Safe), which manages the country’s $4tn in reserves.
Safe has spent an estimated more than ￠2.5bn on stakes of about 2 per cent each in five of Italy’s largest companies: Fiat Chrysler Automobiles, Telecom Italia, Prysmian and state-controlled energy groups Eni and Enel.
The move demonstrates how the central bank’s semi-autonomous investment arm has departed from its traditionally conservative strategy as yields on fixed income assets have fallen in recent years.
Italy has been one of the main focal points of Chinese investment into Europe in recent years with an estimated ￠5bn spent in what has been dubbed as the dawn of a second Marshall Plan for the continent’s troubled periphery.
“I don’t think these are strategic investments, I think these are financial investments, and they will continue,” said Innocenzo Cipolletta, an economist at the University of Trento.
“If you believe the euro will remain, it’s better to invest in a country at the low point in its economic cycle than one at a high point – you can take the upside,” Mr Cipolletta added.
The Italian government has been enthusiastically supporting Chinese investment in the eurozone’s troubled third-largest economy, with few signs of any political backlash to the cash pouring into the country from Beijing.
“We must bring more China to Italy and take more Italy to China,” Matteo Renzi, the Italian prime minister, said last week as he met with Li Keqiang, the Chinese premier, in Rome and signed ￠8bn of commercial deals between the two countries.
“We are welcoming every new institutional investor,” Mediobanca said.
Safe’s emergence as a shareholder of Mediobanca comes just as Italy’s largest investment bank is in the middle of a strategic drive to internationalise its business and sell ￠1.6bn in equity stakes that have held it at the centre of Italian corporate power for half a century.
Alberto Nagel, the lender’s chief executive, unveiled a wide-reaching plan a year ago aiming to cut its stakes in insurer Generali, Telecom Italia and RCS Mediagroup as it switched to focus on European expansion, investment banking and its retail banking business.
He also hired Stefano Marsaglia from Barclays last year to co-head its investment bank with a view to transform Mediobanca’s London office into its European hub for all sector and capital market teams. Shares in Mediobanca rose 4.1 per cent to ￠6.61, giving the bank a market capitalisation of ￠5.7bn.