We are advisors to the Made in Italy Fund, a mutual fund exclusively focused on Italian small capitalization stocks.


The Italian stock market is concentrated in financial companies and public utilities. Add ENI in Energy and a few Consumer stocks and you have three quarters of the market. As a result, an investor who buys an Italy ETF, or an “Italian equity” fund benchmarked around the index, is buying those few sectors and therefore dramatically underinvesting in what is the core of the Italian economy – small companies.

The Made in Italy Fund concentrates only on small caps – companies with a market capitalization below one billion euro. They are 80% of the quoted names, but less than 10% of total market value.

The Fund’s objective is to select the best 30 companies within that universe, in terms of profitability, growth and valuation.


Investment Philosophy

Markets are not efficient, but continually offer attractive opportunities to active investors who can take advantage of them through diligent analysis of intrinsic value.

Stocks are not bits of paper of a trading game, but represent a fractional ownership of a company, allowing investors to share in the company’s profits.

The Fund selects stocks with the mind-set of a long term investor, who wants to participate in the success of the companies he owns. Its aim is to be a stable shareholder and a point of reference for the best companies in the dynamic Italian Small cap universe.


Company screening

Constant search for attractive investment opportunities, through a systematic screening of the Small cap universe based on quantitative and qualitative rules, as well as through taking advantage of bargains offered by market volatility.

Fundamental analysis

Analyses are centred on a direct relationship with top management and regular visits to company headquarters. Selection is based on the history of financial reports and valuation, with emphasis on corporate governance and share ownership.


The aim of the valuation work is to estimate the company’s profitability and growth prospects in order to arrive at a reasonable assessment of its intrinsic value.

Selection decision

The Fund selects companies where there is a considerable gap between intrinsic value and market price. The magnitude of such margin of safety determines the size of the position.

Selection monitoring

Once in the portfolio, companies are constantly monitored to ensure the validity of the selection thesis. Position weights are adjusted accordingly.

Deselection decision

The Fund has a low turnover. Positions exit the portfolio once they close their value gap through appreciation, or in order to leave space to more attractive alternatives.


The Fund is invested in small stocks, many of which have limited free float and daily liquidity. Therefore, it can be subjected to periods of heightened volatility and may be adversely affected by periods of extensive and prolonged equity market downturns.


You do not adhere to its long term orientation and intend to trade in and out of the Fund for short periods of time.

You are a highly risk-averse investor, unprepared to bear the Fund’s volatility.

You intend to invest in the Fund more than a limited portion of your overall financial wealth.


Bayes Investments Founder and CIO

Massimo started his career as a sector analyst in 1988 at JP Morgan Investment Management, working between New York and London, where he rose to become Head of the Global Balanced Group, with overall responsibility for international balanced portfolios. In 1999 he left JPMIM to become Chief Investment Officer and Director General at Sanpaolo IMI Asset Management in Milan, where in 2000 he became Chief Executive Officer. He left the company in September 2001 to start Horatius, which was incorporated in 2004 as an advisory company and in 2007 became an asset management company. He was a founding shareholder, a Board member and the CIO of Horatius. In 2012 Massimo left Horatius to go back to London and manage his personal wealth. He founded Bayes Investments in 2014.

Massimo graduated in Economics at LUISS, Rome and holds a Master’s Degree (M.Phil.) and a Doctorate (D.Phil.) in Economics from the University of Oxford (Trinity College). Massimo also taught Behavioural Finance in the Master in Economics course at Bocconi University in Milan and served in the Editorial Board of the Financial Analyst Journal.

In 2012, Massimo started the Bayes blog at www.massimofuggetta.com, which has acquired popularity in the Value Investing community.

Massimo Fuggetta


Massimo Fuggetta, Chairman

Alessandro Ciravegna
Has 31 years experience in financial markets. He began his career at Merrill Lynch in London and subsequently joined Citigroup in various investment advisory and business management functions in London, Milan, Athens and New York. In 2002, he founded New College Capital Ltd to provide specialist investment advice to European investors.

Guido Manca
is the Chief Executive Officer at Independent Strategy. He runs the company and looks after global marketing and distribution of the firm’s products. He started his career at Salomon Brothers (fixed income) followed by Morgan Stanley (equities). He co-founded Independent Strategy in 1994. He holds an Honours degree in Economics from Trinity College, Cambridge.

Alexandros Rammos, Secretary
has 20 years experience in financial markets. In 1990, his family founded Pegasus Securities in Athens, a brokerage company which rose to prominence by eventually becoming one of the largest privately-owned retail brokerage houses in Greece. Alexandros was the company CEO between 2009 and 2011. In 2014 he became Managing Partner of Versal Investment Services, an independent investment advisor in Athens. He joined New College Capital in October 2015 mainly focusing on compliance and business development.


Giulio Antonello
Giulio is a graduate from the Wharton School of Finance of the University of Pennsylvania, where he received a Bachelor of Science (Finance) in 1990. In 1996 he completed a Masters degree at Columbia University’s School of International and Public Affairs with an Economics Major.

He started working in New York in 1990 as an investment banker for Credit Agricole. In 1993, he joined Societé Suisse de Ciment Portland in Switzerland. Soon after, he was instrumental to the creation of the IBI Group, an advisory and merchant banking boutique with offices in Milan, Zurich and Lugano. From 1997 to 2005, he led several advisory and investment projects. In 2006 he became CEO of Alerion, with the objective of focusing the company on the renewable energy sector. He left Alerion in 2015 and currently operates as an independent investor. His family holding company, Financiere Phone 1690, has stakes in a number of listed and private companies in the real estate, industrial, energy and agricultural sectors.

Giulio is currently on the board of Eurotech SpA, a listed leader in the “Internet of Things” space. He has also served on the board of Italcementi SpA, a leading listed cement operator for which he was the leading independent director and member of the remuneration and strategic committees. In the past, he has served on the board of other numerous listed companies besides Alerion Clean Power and namely: Reno de Medici, SIAS, Realty Vialog and Erg Renew. He was also a board member of Campisi Sim (now Banor Sim) and Telelombardia.


Perché così poche?

È noto in finanza come equity home bias puzzle: la preferenza degli investitori per le azioni del proprio paese e il conseguente sovrappeso nei loro portafogli rispetto ai precetti della teoria standard.

Non in Italia. Mentre sono carichi di obbligazioni governative, gli investitori italiani non hanno alcuna predilezione per le azioni domestiche. Non pensano alle azioni come domestiche verso estere: le azioni italiane sono semplicemente una fetta dei loro portafogli azionari europei, o una fetta ancora più sottile della loro esposizione alle azioni globali.

Questo ha poco a che fare con il rispetto dei principi di diversificazione. È il risultato di 150 anni di sottosviluppo – ben documentato in questo volume dal responsabile del Dipartimento Studi della Consob, Giovanni Siciliano, come nel suo precedente libro.

La persistente diffidenza degli italiani nei confronti del loro mercato azionario ha avuto un enorme impatto inerziale sulla sua crescita, che si sente ancora oggi nonostante i decisivi progressi in leggi, norme e regolamenti registrati nel corso degli ultimi due decenni. Il mercato azionario italiano è ancora molto piccolo rispetto alle dimensioni dell’economia. Ci sono solamente circa 300 società quotate – meno della metà delle aziende quotate in Francia e in Germania e meno di un quarto di quelle del Regno Unito.

Perché così poche? La risposta comune punta alla riluttanza dei proprietari delle società a condividere il controllo e a sottoporsi al pubblico scrutinio. Ma la risposta è fuori bersaglio. Il problema non è la mancanza di offerta. Ci sono centinaia di aziende italiane che sarebbero felici di quotarsi e accedere ad una fonte così importante di finanziamento e di riconoscimento. Il problema è la mancanza di domanda. In Francia e in Germania, e di nuovo doppiamente nel Regno Unito, ci sono dozzine di società di gestione del risparmio il cui principale interesse e competenza è il mercato azionario domestico. Così una società che arriva sul mercato sa di poter contare su un interesse naturale. Se la sua proposta di valore è convincente, ci sarà domanda interna per le sue azioni.

Non in Italia, dove tale focus è notevolmente carente. Con poche eccezioni, i fondi che investono nel mercato italiano sono gestiti attorno all’indice, che è fortemente concentrato nel settore finanziario e in quello dei servizi di pubblica utilità. Aggiungendo ENI, Luxottica e pochi altri produttori di beni di consumo si ha la maggior parte del mercato italiano – circa 50-60 titoli in tutto, che lasciano poco spazio alle altre 250 aziende, che sono quindi assenti nella maggior parte dei fondi, o possono al più avere una presenza simbolica in quelli più grandi, limitata ad un paio di decimali.

Prendiamo il caso di El.En., l’azienda fiorentina produttrice di sistemi laser medicali ed industriali. La società ha un valore di mercato di circa 300 milioni di euro ed è posseduta al 48% dai suoi fondatori e manager. Questo lascia più di 150 milioni di capitale flottante. Chi possiede queste azioni? In un paese focalizzato sul mercato azionario interno ci si aspetterebbe di vedere un buon numero di fondi italiani tra i principali azionisti. Ma non è così. Il maggiore azionista è olandese, il secondo è americano, il terzo svizzero, il quarto belga, e così via. C’è un solo fondo italiano tra i primi dieci, ed è l’eccezione piuttosto che la regola.

Facciamo il confronto con Store Electronic Systems, una società francese che vende sistemi di etichettatura. Stessa industria – Apparecchiature elettroniche – stesse dimensioni (valore di mercato 270 milioni) e stesso flottante, 52%. La differenza è che, tra i primi dieci azionisti esterni, otto sono francesi. E questa è la regola piuttosto che l’eccezione. Analoga situazione in Germania, dove il livello medio di flottante è paragonabile all’Italia; ed è più pronunciata nel Regno Unito, dove il flottante è più del doppio e praticamente tutti i principali azionisti di imprese di piccole dimensioni sono gestori di fondi locali.

Cosa si sono persi i fondi italiani ad ignorare El.En.? Ecco la risposta:

Fonte: Factset

E questo non è solo il caso di El.En., ma di decine di altre imprese, molte delle quali appartengono al segmento STAR della Borsa Italiana, dove le imprese sono obbligate a sottoporsi a standard particolarmente rigorosi di corporate governance, trasparenza e comunicazione. Questa è la performance del segmento STAR dal suo lancio, rispetto all’indice principale:

Fonte: Factset

Date una buona occhiata al grafico: mostra che il valore del mercato italiano si è dimezzato dal 2002. Non è sorprendente quindi che il numero dei fondi Italia si sia più che dimezzato nel corso del periodo – in barba all’home equity bias. Allo stesso tempo, tuttavia, l’indice del segmento STAR è andato su 2,5 volte – una performance stellare che, oltre agli azionisti di controllo, ha ampiamente beneficiato gli investitori esteri piuttosto che gli italiani.

Scarsa fiducia, quindi nessun home bias, quindi bassa domanda, quindi pochi fondi, quindi poche quotazioni. Per invertire questo circolo vizioso è sbagliato iniziare dalla fine, confondendo causa ed effetto. In economia è la domanda che crea l’offerta, non il contrario.

Oggi c’è ampio supporto per la fiducia. Il quadro istituzionale italiano in materia di tutela degli investitori non è secondo a nessuno. Questo non significa naturalmente che sia impeccabile e privo di problemi. Ma i problemi sono simili a quelli riscontrabili in altri mercati, e incomparabili, in frequenza e ampiezza, al caos del XX secolo.

Il passo successivo è quello di incoraggiare l’interesse degli investitori per il loro mercato interno. Ma questo può essere fatto solo mettendo in evidenza i suoi punti di forza, non ribadendo lo status quo. Le piccole e medie imprese sono il nucleo dell’economia italiana. Quindi dovrebbero essere il nucleo di fondi di investimento volti a rilanciare la domanda latente di azioni domestiche. Solo una domanda naturale per le loro azioni può indurre un decisivo salto nella motivazione delle aziende private ad accedere al mercato, riducendo così e infine colmando il divario tra il mercato italiano e i suoi vicini.

Il Made in Italy Fund è apertamente home-biased – detiene unicamente aziende italiane. Ma lo fa nella maniera che riteniamo più ragionevole: tralasciando l’indice generale e concentrandosi sui titoli con un valore di mercato al di sotto di un miliardo di euro. Si tratta di un universo attualmente comprendente circa 250 aziende, che sono circa l’80% dei nomi quotati, ma rappresentano solo il 9% del valore totale del mercato.

Molti dei titoli inclusi nel fondo appartengono al segmento STAR, ma questo non è un requisito. Inoltre, tracciando una linea al di sopra di un miliardo  lasciamo fuori circa dieci dei più grandi titoli dell’indice STAR – aziende di successo come Brembo (3.3 miliardi di capitalizzazione), IMA (2.2 miliardi) e Interpump (1.7 miliardi), che rappresentano oltre il 50% del valore dell’indice.

Il nostro obiettivo è di selezionare le storie di successo di domani. Man mano che queste crescono, il Made in Italy Fund si accrescerà con loro, a beneficio dei suoi sottoscrittori. È augurabile che altri fondi ci seguano nel tempo, accrescendo la domanda di azioni domestiche e così creando un terreno favorevole per l’accesso al mercato di più imprese, a beneficio dell’intera economia italiana.

Why so few?

It is known in finance as the equity home bias puzzle: investors’ preference for domestic equities and their consequent portfolio overweight compared to the precepts of standard theory.

Not in Italy. While laden with domestic government bonds, Italian investors have no penchant for domestic equities. They don’t think of equities as domestic vs. foreign: Italian equities are just a slice of their European equity portfolios, or an even thinner slice of their global equity exposure.

This has little to do with adherence to diversification principles. It is the result of 150 years of underdevelopment – well documented in this volume (in Italian) by the head of Consob Research Department, Giovanni Siciliano, as well as in his earlier book.

Italians’ long-standing misgivings about their equity market have had a huge inertial impact on its growth, which is still being felt today despite decisive progress in laws, rules and regulations over the last two decades. The Italian stock market is still very small compared to the size of the Italian economy. There are only about 300 quoted companies – less than half of the quoted companies in France and Germany and less than a quarter of those in the UK.

Why so few? The standard answer points towards company owners’ reluctance to share control and to submit to public scrutiny. But this is wide of the mark. The problem is not lack of supply. There are hundreds of Italian companies that would be happy to seek quotation and gain access to such an important source of finance and recognition. The problem is lack of demand. In France and Germany, and again doubly so in the UK, there are dozens of fund management firms whose main focus and expertise is the domestic equity market. So a company that comes to the market knows it can rely on a natural interest. If its value proposition is sound, there will be domestic demand for its stock.

Not in Italy, where such domestic focus is noticeably lacking. With few exceptions, Italy-centred funds are managed around the index, which is heavily concentrated in financials and utilities. Add ENI, Luxottica and a few other consumers and you have most of the Italian market – about 50 to 60 stocks in all, leaving little space for the other 250 companies, which are therefore absent in most funds, or may have a token presence in the larger ones, confined to a few decimal points.

Take El.En., a Florence-based producer of medical and industrial laser systems. It has a market value of around 300 million euro and it is 48% owned by its founders and managers. This leaves more than 150 million of free float. Who owns those shares? In a country focused on its domestic equities, one would expect to see a good number of Italian funds among the top shareholders. Not so. The largest shareholder is Dutch, the second is American, the third Swiss, the fourth Belgian, and so on. There is only one Italian fund among the top ten, and that’s the exception rather than the rule.

Let’s compare it to Store Electronic Systems, a French company that sells shelf labelling systems. Same industry – Electronic equipment – same size (270m market cap) and same 52% free float. The difference is that, among the first ten external shareholders, eight are French. And that’s the rule rather than the exception. Similar situation in Germany, where the average level of free float is comparable to Italy; and it is more pronounced in the UK, where the free float is more than double and virtually all major shareholders of smaller companies are local fund managers.

So what have the Italy funds missed by ignoring El.En.? Here is the answer:

Source: Factset

And this is not just the case for El.En., but for dozens of other companies, many of which belong to the STAR segment of the Italian Stock Exchange, where companies are required to submit to stricter standards of corporate governance, transparency and communication. Here is what the STAR segment looks like since inception, relative to the main market index:

Source: Factset

Take a good look at the graph: it says that the value of the Italian market has halved since 2002. It is no wonder, therefore, that the number of Italy funds has also more than halved over the period – so much for the equity home bias. At the same time, however, the STAR index has gone up 2.5 times – a stellar performance which, apart from company insiders, has largely benefited foreign rather than domestic investors.

Low trust, hence no home bias, hence low demand, hence fewer funds, hence few quotations. To invert this vicious circle, it is wrong to start from the end, confusing cause and effect. In economics it is demand that creates supply, not the other way around.

Today there is an ample base for trust. The Italian institutional framework regarding investors’ protection is second to none. This of course doesn’t mean that it’s faultless and problem-free. But issues are similar to those encountered in other markets, and incomparable, in frequency and magnitude, to the shambles of the 20th century.

The next step is to encourage investors’ interest in their home market. But this can only be done by highlighting its strengths, not by reiterating the status quo. Small and medium companies are the core of the Italian economy. So they should be the core of investment funds aiming to revive investors’ latent demand for domestic equities. Only a natural demand for their shares can induce a decisive leap in private companies’ motivation to go public, thus reducing and ultimately filling the gap between the Italian stock market and its neighbours.

The Made in Italy Fund is overtly home-biased – in fact, all it owns is Italian companies. It does so in what we think is the most sensible way: disregarding the general index and focusing on stocks with a market value below one billion euro. It is a universe currently comprising about 250 companies, which are about 80% of the quoted names but represent only 9% of total market value.

Many of the stocks included in the fund belong to the STAR segment, but this is not a requirement. Also, by drawing the line above one billion, we leave out about ten of the largest stocks in the STAR index – successful companies such as Brembo (3.3bn market cap), IMA (2.2bn) and Interpump (1.7bn), which represent more than 50% of the value of the index.

Our goal is to select the success stories of tomorrow. As they grow, the Made in Italy Fund will grow with them, to the benefit of its unit holders. Hopefully, other funds will follow us over time, creating more demand for domestic equities and setting the ground for more companies to come to the market, to the ultimate benefit of the entire Italian economy.