Tag: finance

Venture capital in the time of Covid: half of the world’s investment funds have changed strategy – but only 38.5% in Italy

Posted on | by Mirja Calgaro | Leave a Comment on Venture capital in the time of Covid: half of the world’s investment funds have changed strategy – but only 38.5% in Italy

The Bureau of Entrepreneurial Finance (BEF), a permanent centre established at the initiative of the Politecnico di Milano’s School of Management and the Politecnico di Torino, in order to connect the most recognised scholars and players in the field of venture capital in Europe.

 

More than 500 responses to the survey, received mainly from European and North American operators in the second half of 2021, suggest that the current trend is to invest at later stages in the lifecycle of start-ups in order to reduce the level of risk and to favour sectors like healthcare, energy and pharmaceuticals, driven by the pandemic.

Milan, 9 May 2022 – Venture capital in the time of Covid-19. As the pandemic significantly impacted many aspects of the global economy, forcing businesses to redesign their internal processes in order to stay in the market, it also drove venture capitalists to adapt their own investment practices to the changing scenario. Examples of this include investing at later stages in the lifecycle of start-ups or favouring sectors like healthcare, energy and the environment, pharmaceuticals and financial services, while turning away from digital services and commercial distribution.

These are some of the findings highlighted in the Report on Venture Capital and Covid-19 which was presented this morning at the Politecnico di Milano during the launch of the Bureau of Entrepreneurial Finance (BEF), a permanence centre established at the initiative of the Politecnico di Milano’s School of Management and the Politecnico di Torino – co-founded by professors Massimo Colombo, Annalisa Croce, Elisa Ughetto and Vincenzo Butticè – with the aim of providing networking and discussion opportunities for the most recognised scholars and players in the field of venture capital in Europe.

The survey was conducted in the second half of 2021, at the height of the post-Covid economic recovery but while price increases linked to raw materials and energy were already being seen, and responses were received from more than 500 funds, with excellent coverage of European funds (which increased their investments by 2%) and North American funds (which reduced their investments by 1%).

Globally, half of all funds (52%) stated that they had changed their investment strategy after Covid, even if only moderately. This percentage was much lower for European funds (57% of which did not change anything) and lower still (61.5%) for Italian funds, probably due to the fact that they tend to have higher rates of cross-border investment (90.2% of those making cross-border investments – 83.5% in Italy – did not reduce them in favour of domestic investment).

Another interesting aspect is the reduction in the number of seed stage investments, and more generally investments in the initial stages of the lifecycle of start-ups, favouring later stages of development (ranging from +1.2% for early- and late-stage investments to +4.4% in the mid-stage investments), with the trend being more evident among smaller funds.

“Uncertainty has increase everywhere and investors therefore prefer to shift the focus of their investment towards more mature businesses with more moderate risk profiles”, explains Elisa Ughetto from the Politecnico di Torino’s Department of Management, Economics and Industrial Engineering, one of the curators of the study and co-director of the BEF together with Annalisa Croce from the Politecnico di Milano’s Department of Management, Economics and Industrial Engineering. “Moreover, also in response to the sudden changes occurring in recent years, investors are relying less on their instincts (gut feeling) than in the past, and are basing their decisions more on objective aspects such as favourable economic environments, business models and any public incentives”. “Investment strategies have also changed”, adds Annalisa Croce. “Business sectors that performed well during the pandemic, such as healthcare and pharmaceuticals, are now being favoured, while sectors which traditionally receive high levels of investment from venture capital funds, such as ICT, are in decline”.

The sectors which have seen increased investment are healthcare (+2.4%), energy and the environment, pharmaceuticals and financial services (all +1%), training and semiconductors (+0.6%), while digital services (-1.4%), including those linked to the internet and mobile devices (-1%), and commercial distribution (-1.6%) are in decline.

Funds have also lowered their expectations for expected returns (IRR) and have become stricter in their assessment of start-ups in terms of the required multiple. In essence, they are taking on a lower risk for lower expected returns (-1.3% on average): although the largest band fell by two percentage points, it retains a target IRR of between 20% and 29%, while some investors – the number of which has also risen very slightly – still expect earnings of between 40% and 50%. Even the valuation of start-ups already in portfolios has been subject to remodulation: in 40% of cases it has fallen (significantly in 9% of cases) since, in the changed scenario, a reduction in value is expected when the funds exit their position.

One last curious detail is the fact that post-investment interaction between venture capitalists and entrepreneurs, aimed at supporting the start-up’s growth, has increased by almost one third (+28.4%). While in the past they mainly talked between once and three times a month, weekly or even daily contact is now on the rise.

Politecnico di Milano won the Italian final of the CFA Research Challenge 2022

Posted on | by Beatrice Grillo | Leave a Comment on Politecnico di Milano won the Italian final of the CFA Research Challenge 2022
Five engineers of the School of Management beat University Federico II Naples and University of Pavia with the financial analysis of Reply and prepare for the EMEA regional final. The world final will be held on 16 May.

 

The team from the School of Management of Politecnico di Milano won the Italian final of the CFA Research Challenge 2022, the global finance competition organised by the CFA Institute and promoted in Italy by CFA Society Italy with the valuable support of FactSet Italia and Kaplan Schweser.

The final round took place in Reply’s Milan headquarters on Tuesday 1 March, involving ten universities, 50 students and over 30 professionals. The Italian phase, coordinated by CFA Society Italy, saw the participation of teams representing the following universities: Università Cattolica, Politecnico di Milano, Ca’ Foscari di Venezia, Università di Roma Tor Vergata, University of Florence, University of Bologna, Libera Università di Bolzano, University of Pavia, Università Politecnica delle Marche and Università di Napoli Federico II.

Students Gianluca Dente, Alberto Gegra, Andrea Rampoldi, Alessandro Criniti and Francesco Saverio Pirolo, under the guidance of professors Laura Grassi and Marco Giorgino and CFA mentor Alberto Mari, presented their financial analysis of Reply’s stock to a panel of six experts from the financial sector: Mauro Baragiola, Luca Forlani, CFA, Marco Greco, Paolo Perrella, CFA, Patrizia Saviolo, CFA, and Carla Scarano. Second and third place went respectively to Università di Napoli Federico II and the University of Pavia.

Politecnico di Milano will go straight on to the EMEA (Europe, Middle East and Africa) regional final, which will be held on 28 April. As testament to the high quality of our students and the professionals who guide them, Italy already won the EMEA regional final in 2011, 2014 and 2016.
The World Final, on the other hand, will be held on 16 May 2022, pitting the winners from EMEA, the Americas and Asia Pacific against each other, and the winners will be officially announced on 17 May 2022.

“CFA Society Italy, in its many years of activity, has built a close relationship with the Italian universities to promote the principles of integrity and professional excellence to the younger generation”. CFA project coordinator Giuseppe Quarto di Palo said. “We are delighted to be able to offer universities and their talents the opportunity to measure themselves in a realistic competition, aimed at reproducing the experience of a research office of management companies or investment houses. We also offer the best students scholarships to the CFA Programme, in order to obtain a globally recognised certification in the financial sector”.

“The Research Challenge is an initiative that channels important objectives into the world of education and academia. It is becoming increasingly important to bring students closer to the job market, combining academic knowledge with the techniques and tools used by professionals in the financial sector. In addition, we want to highlight the excellent standards of Italian universities at European and global level”. Giuliano Palumbo, president of CFA Society Italy commented. “This project could not exist without the valuable contribution of the association’s volunteers and the partners who supported the initiative FactSet, Kaplan Schweser and Reply, companies that were researched by the students”.

“As Michael Jordan once said, talent wins games, but intelligence and teamwork win championships. I’d like to congratulate the students of the Politecnico di Milano who demonstrated not only above-average technical skills, but also and above all teamwork and spirit of cooperation aimed at achieving the final victory” stressed Stefano Di Rosa, CIIA, Senior Sales Rapresentative of FactSet Italia, sponsor of the Italian edition of the CFA Research Challenge since 2016.

“Year after year, the competition allows the best talents from Italian universities to pit their wits against professionals  of the highest calibre, increase their knowledge of the fundamentals of equity research, develop soft skills and compare notes with each other”. commented Politecnico di Milano professors Laura Grassi, Assistant Professor of Investment Banking, and Marco Giorgino, Full Professor of Financial markets and institutions. “We are very proud of our team’s victory, which rewards our five members for their great sacrifices, and in turn makes them a reference for future colleagues next year. For them, this is the best way of entering the professional world and for our university it is a further acknowledgment of our quality. We are now looking to EMEA, with the will, commitment and desire to replicate the same result”.

“The CFA Research Challenge was definitely the toughest challenge of our lives, and at the same time the most stimulating experience on both a professional and personal level. It was an incredible opportunity that allowed us to work closely with our CFA mentor Alberto Mari, and with our professors Laura Grassi and Marco Giorgino, whom we’d like to thank very much. We would also like to thank the CFA Society Italy for making this possible and we look forward to carrying our country’s flag high in EMEA,” were the first words expressed by the Politecnico di Milano team after the win.

 

Inspiration from evolutionary approaches: algorithms and challenges in finance

Posted on | by Marta Re Ferrè | Leave a Comment on Inspiration from evolutionary approaches: algorithms and challenges in finance

Advanced analytical techniques borrowed from a heterogeneous literature to extract valuable insights from data are gaining momentum within the finance community. This article briefly introduces how financial ecosystems are increasingly responsive to the application of biological and evolutionary algorithms aimed to analyze the behavior and dynamics of their participants.

Andrea Flori, Assistant Professor in Management and Finance at School of Management, Politecnico di Milano

 

In a popular 1973 work, Burton Malkiel showed how a blindfolded monkey throwing darts at the financial pages of a newspaper could select a portfolio which would perform just as well as one carefully constructed by experts (“A Random Walk Down Wall Street”, 1973), helping to fuel the debate on the possibility of extracting information from financial data and from the behaviour of market operators.

Financial markets are an arena where predictive techniques and algorithms attempt to challenge market efficiency using pattern identification.

Within this framework, numerous methodologies borrowed from various scientific fields have spread and combined to provide a new perspective for studying the dynamics of complex financial systems and the interdependencies that govern their participants’ relationships.

Market infrastructure, the role of information and the behaviour of the operators represent, therefore, some typical pillars employed to define such approaches of analysis within financial contexts.

In particular, approaches inspired by biological perspectives have captured the attention of many financial operators interested in a new generation of intelligent techniques of analysis and calculation that mimic human actions.

Hence, genetic algorithms and neural networks have pervaded financial literature and contributed to the dissemination of methodological innovations inspired by the biological evolution and human functioning. By relying on a multidisciplinary and computationally evolved perspective of analysis, these approaches have shown to obtain promising results compared to traditional methods of statistical analysis.

Specifically, genetic algorithms employ natural selection and genetics tools and perspectives to identify the best solution to problems. By mimicking biological evolution, an initial population is iteratively mutated and recombined to determine subsequent generations, so that changes with a desirable impact are retained in the gene pool of future generations in an attempt to converge towards optimal solutions. Each individual, i.e. candidate solution, is assigned a fitness value, and individuals with more promising characteristics are assigned a higher probability of mating to generate new individuals, i.e. potentially better performing solutions to problems, thus in line with the Darwinian theory of the “survival of the fittest”. Neural networks, instead, learn from data structure and process a signal through interconnected artificial neurons creating a configuration similar to the human nervous system. Each connection is associated with a weight that contains information about the input signal that inhibits or stimulates the signal that is communicated to the neurons to accomplish a specific task. External information is used as input and processed internally in one or more layers of analysis by activating specific neurons that transmit the signal to others before determining an output with a predictive accuracy that can be increased by a learning process of previous actions. Neural networks are a complex adaptive system which can change and adapt its internal structure based on the situation and information that crosses it.

These approaches are therefore flexible and able to adapt to new circumstances, possibly learning from past experience and reacting to stimuli coming from new signals in the system.

It is not surprising, therefore, that such techniques, either separately or combined with each other, are increasingly being applied in many financial areas, such as predictive market analysis and portfolio allocation rules, hedging of financial instruments, and robo-advisor applications.

With the recent increase in computational power and resources and their wide availability, advanced techniques for massive data analysis are, in fact, gaining momentum within the finance community, contributing to a rapidly growing body of literature that exploits, in addition to the techniques mentioned above, a large-scale use of statistical and deep learning concepts to identify patterns in financial markets, study the complex non-linear relationships between and within financial time series, and identify market anomalies.

In addition, repeated episodes of financial crisis with their far-reaching externalities and cascading effects on financial markets and the real economy have driven the study and provision of new tools to monitor and predict the spread of instability in financial systems and manage critical issues that may emerge.

However, adopting statistical learning approaches and deep learning techniques in the study of financial systems requires new paradigms, knowledge and practical skills necessary to develop a solid base of models and algorithms that are properly applied in the reference domains while exploiting the potential arising from a transdisciplinary approach to scientific investigation.

In the world of finance, such tools of analysis are of the utmost importance for future technological development and play a fundamental role in many financial ecosystems. Massive data analysis using advanced statistical and deep learning techniques is in great demand in many areas and in a wide range of applications, which include in addition to forecasting market trends, also for example the study of dependencies between financial systems, the approval of credit lines, the efficient management of financial resources, the detection of anomalies and frauds, and risk assessment.

These challenges seem to indicate therefore a new research perspective, at the crossroads between data mining, predictive analysis and causal modelling, which can allow us to exploit the strength of these algorithms of analysis and calculation to investigate economic and social problems of real and changing environments.

When finance rhymes with innovation. Welfin introduces itself

Posted on | by Simona Strepparola | Leave a Comment on When finance rhymes with innovation. Welfin introduces itself

An idea, project work, a startup: Welfin’s story progressed from the classrooms of MIP to the financial market thanks to its strong innovative imprint. It will be the first P2P loan platform with credit guaranteed by a company to be launched on the market. Its founders tell about the project.

«In Italy the consumer credit market is constantly expanding and P2P (peer to peer) loans continue to have great potential». Why not start from this and rethink credit between private players in a new intra and inter-corporate perspective? This is the reflection from which Ideo Righi, Francesco Giordani, Alessandra Bellerio and Roberto Bertani, founders of Welfin, as well as 2018 Part-time EMBA alumni, began.
Welfin is a platform that revolutionizes credit between employees, allowing one or more company communities to obtain the maximum from sharing their resources. In the words of its five founders, «Welfin brings together lender, borrower and company (acting as guarantor) by promoting the creation of favourable conditions for all players involved». Let’s take a closer look.

A business model in which all parties are in agreement

In a consumer credit market with interest rates that tend towards the high side, credit concession policies on the part of companies are often cautious and the cost of debt collection expensive. «Welfin steps in, creating a virtuous circle that rewards the three players involved, lender, borrower and company, through a win-win-win system» explains Francesco. «Win for the lender, because they have a guaranteed return from the company at above-market rates; win for the borrower because they also obtain favourable rates and win for the company, which acting as a guarantor, increases the sense of belonging of its employees and improves its reputation», continues Alessandra. «Welfin offers the company a new welfare instrument with which to optimize the management of outstanding credit, creating a shared economic benefit by focusing on financial innovation – stresses Ideo -. There are already many entrepreneurs who, aware of the efficiency of Welfin’s business model, want to implement the platform as soon as possible».

Genesis and development of Welfin. From project work to the choice of “doing business”

But what was the starting point? «The observation of an entrepreneurial reality suffering from the insolvency of its employees towards consumer credit institutions allowed us to study a system that could help all parties involved, from the company to employees. We therefore identified a need and devised a solution» explains Ideo. For Alessandra, «the key values that inspired Welfin were ethics, transparency and usefulness for employees». It’s an idea that was first project work for the 2018 Part-time EMBA and then – thanks to the trust and success achieved – became a startup. «When we realized its potential, we decided to “do business”» says Francesco. «We choose each other inside the classroom of the master’s programme, and we created a close-knit, cross-cutting team, with previous business experience and thus a clear perception of risks. A team whose members are on the same wavelength, both in terms of personal and professional growth», comments Alessandra.

Finance awards sustainable innovation

Welfin won the “Fintech & Insurtech 2019” Prize, set up by the Observatory of Politecnico di Milano, for the most innovative projects in the financial field. What were its winning attributes? «A brand-new business model that is able to innovate the financial sector in a sustainable and intelligent way» its creators say. «Thanks to the recognition obtained we’ll begin a period of innovation through PoliHub, at the same time as developing all the aspects necessary to go to market, from tax to legal ones, so as to be ready at the official kick-off».
The company has also begun a dialogue with the Bank of Italy. «We carried out an initial assessment of the regulatory compliance of the business model. An experience that allowed us to confirm and offered food for thought to make it to the go to market phase even more prepared», according to Francesco, Alessandra and Ideo, who conclude by illustrating the role MIP had in this experience and its strengths: «Its network, the professionalism of professors and the enormous support in all phases of product development. The master’s programme guaranteed us an entrepreneurial, highly pragmatic and interactive experience and was also an incubator of talent and open-mindedness for the business application models and leadership development. And we believe Welfin’s business model could be even more effective in the Covid-19 recovery period, when in the face of increased obstacles for consumer credit access, it will provide support for families and individual workers in difficulty».
All there’s left to do is to (re)start.

Impact investing: so far, so fluid

Posted on | by Marta Re Ferrè | Leave a Comment on Impact investing: so far, so fluid

As sustainability and impact take on a primary role in the business agenda and amongst financial players, impact investing has been growing steadily, but still falls short of having a clear and structured character. A fluid situation that pays testament to its salience, but that may also hinder its future development.

Mario Calderini, Full Professor of Social Innovation School of Management, Politecnico di Milano

The term ‘Impact Investing’ was coined in 2007 by the Rockefeller Foundation. It can be defined as a class of investments in companies, organisations and funds with the intention of generating a social and environmental impact alongside a financial return. It sets itself apart from mainstream finance by including social returns in the investor’s expectations, and yet it diverges from philanthropy and grant-making because some financial return, or at least return of capital, is expected.

Nowadays, the global Impact Investing industry is still in its nascent stages. Nevertheless, according to the report published in 2019 by the Global Impact Investing Network, the size of the Impact Investing market is growing at an impressive pace: compared to 2018, the volume of capital invested grew by 13%, reaching a total of more than $514 billion. Indeed, considerable public and private capital has been and will be deployed to fund organisations with the mission of addressing social needs; in that sense, the projection for future developments is optimistic.

As a matter of fact, 2019 has been a very significant year for impact investing. The newly-central role of the sustainability agenda, together with many other signals coming from the very heart of the economic and financial system – including the now world-famous letter by Larry Fink, the CEO of Blackrock, or the manifesto of the American Business Roundtable, together with the resulting cover pages of many influential newspapers around the world, such as the Financial Times and the Economist – have officially established sustainability and impact as the new normal amongst financial players.

It is for this reason that the period from late spring 2018 to the summer of 2019 was defined as the golden year of sustainability and impact, to mark the fact that sustainability and impact are no longer lateral, marginal or side issues in the business agenda, but rather they have made their way to the very heart of it. Mainstream economic and financial players are increasingly positioning themselves as proactive forces in the search for solutions to the most pressing environmental and social challenges being faced today. Whilst many are heralding this as excellent news, some others, on a note of scepticism, warn of the possible opportunism and ambiguity that this phenomenon could bring with it. Whatever the interpretation, it is without a doubt that this could represent a very significant paradigm shift.

Strictly speaking, the perimeter of Impact Finance excludes the approaches generally defined as ESG or thematic approaches. Impact Investing is a radical approach to investing in solutions for a better future, and its radicality translates into placing the intentionality-measurability-additionality triad at the centre of the definition of impact investing. Such a radical definition is crucial to identifying generative finance as a counterpoint to extractive finance, a solution-first way of investing, supporting business models that are suitable for promoting concrete creative solutions to emergent social issues whilst also remaining economically sustainable, or even profitable.

Since 2016, Tiresia, the Research Centre for Impact Innovation, Entrepreneurship and Finance at the School of Management of the Politecnico di Milano, has been delivering its annual Impact Finance Outlook, offering a comprehensive overview of the Italian impact investing market.

The first Tiresia Impact Outlook, in 2016, concluded with the consideration that the impact investing sector, as strictly defined, was still in a fluid, experimental phase, uncoordinated and slowly transitioning towards a clearer, more structured configuration. A snapshot that was not entirely different from the international one at the time, in its full development.

Quite surprisingly, the results emerging from Tiresia Impact Outlook 2019 are not significantly different. According to a definition of impact investing based on the intentionality- measurability-additionality triad, the perimeter of the industry still remains relatively small, characterised by a group of consolidated pioneers. The assets under management that qualifies as ‘impact’ total nearly 700 billion, although when we apply an even stricter definition of impact investing, this figure is reduced to just over 200 billion. This represents a relatively very small amount of assets, if compared to the total assets that are now being labelled as ESG or sustainable investment. Nevertheless, this also reflects an interesting feature of the Italian market on the international scene, namely that it is characterised by a significant level of real attention to the aspects which generate social impact and value. We may describe it as a very meaningful niche, potentially able to act as a role model for the more broadly-defined sustainable finance industry currently undergoing a transformation.

Having said this, the ecosystem of impact investing in Italy shows some signs of vitality and innovation. Operators are trying to organise their activities in a more structured way, in terms of both fundraising and asset allocation. These operators face three main problems. The first is linked to the scarcity and weakness of investment opportunities, and subsequently deal flow. An overabundant provision of capital with respect to actual market opportunities is pushing equity investors to face up to reality in two fundamental ways. The first and most virtuous of these consists of providing strong and direct managerial support to invested companies. This translates into providing not only non-financial services, but also structured partnerships with accelerators and incubators, both public and private, in order to engage proactively in the establishment of a pipeline proportionate to the size of the actual impact assets under management. The second, more controversial approach consists of relaxing constraints in impact screening, including target companies that do not entirely comply with the impact triad as eligible investments.

The second obstacle is linked to exit strategies, which yet remain largely undefined due to the lack of organised markets where the value of impact projects can be adequately assessed.

Thirdly, Tiresia’s report demonstrates the lack of convergence and shared interpretation amongst investors regarding the qualifying elements of impact investing. There is no agreement on the notion of impact risk on impact metrics – which are far from being standardised -, on governance models needed to guarantee so-called ‘mission-lock’ and the balance between financial and social objectives, and finally, not even on the nature of the fiduciary duties involved in impact investing. As a consequence, this potential asset class is beset by severe classification problems, hampering the development of the industry.

As a final remark, although we collected several elements indicating a remarkable growth in impact investing for the next ten years, we believe that the tipping point for a genuine and radical impact industry is still a long way down the road. This is mainly due to the lack of attention from public policy makers, poor infrastructural conditions and the persistent lack of business models that are at once robust and genuinely oriented towards social impact objectives.

Politecnico di Milano wins the Italian CFA Research Challenge

Posted on | by Veronica Rafaniello | Leave a Comment on Politecnico di Milano wins the Italian CFA Research Challenge

With the equity research report on Ferrari, the students of Politecnico di Milano defeat Università Cattolica and Università Politecnica delle Marche and are getting ready for the EMEA Regional phase. The Global Final will be held on April 22nd

 

Politecnico di Milano wins the Italian final of the CFA Research Challenge 2020, a world finance competition organized by the CFA Institute and promoted in Italy by FactSet, Fidelity International, Kaplan Schweser and PwC Italia.
The event took place remotely on Thursday, March 5th, following the provisions issued by the Ministry of Health in agreement with the President of the Lombardy Region, and involved nine universities, 43 students and over 30 professionals. The Italian phase, coordinated by CFA Society Italy, was attended by the teams representing the following universities: Università Cattolica di Milano, SDA Bocconi, Politecnico di Milano, Ca’ Foscari di Venezia, Università Carlo Cattaneo LIUC, Libera Università di Bolzano, Università di Pavia, Università Politecnica delle Marche and Università di Napoli Federico II.

Students Marco Aurélio De Oliveira Jesus, Luca Marconi, Matteo Muzio, Giovanni Pintus and Beatrice Sartori, under the guidance of faculty advisors Marco Giorgino and Laura Grassi and mentor CFA Alberto Mari, presented their investment case on Ferrari to a jury of six financial experts: Christian Alessandrini (PwC Italy), Alberto Chiandetti, CFA (Fidelity International), Gabriele Montalbetti, CFA, CIPM (Consultinvest), Marco Greco (Value Track), Pinuccia Parini (Family Strategy) and Carla Scarano (Anima SGR). The second and third place were awarded to Università Cattolica and Università Politecnica delle Marche respectively.

Politecnico di Milano will continue directly to the EMEA (Europe, Middle East and Africa) Regional Final, which will be held on April 1st and 2nd, 2020. An evidence of the high quality of our students and the professionals who assist them, back in 2016, 2014 and 2011 Italy was successful in winning the EMEA regional final.
The Global Finals will take place on April 22nd 2020, bringing together the winners from EMEA, Americas and Asia Pacific.

“We are really happy with the result, which rewards every single effort made during these 4 months. The teamwork and the experience gained are, together with the victory, the biggest prize“. These are the first words expressed by the winning team of Politecnico di Milano. “We would like to thank CFA Society Italy for the organization of the challenge and in particular Mr. Quarto di Palo, Ferrari‘s Investor Relations team for the support and availability, our highly esteemed CFA mentor, Alberto Mari, who dedicated time, energy and above all never stopped believing in us, Prof. Marco Giorgino and Prof. Laura Grassi of Politecnico di Milano for giving us the opportunity to participate in this fantastic experience“.

“This year the company was certainly very challenging, a symbol of our country. We are very happy that our students’ work has been appreciated by the judges“, commented Marco Giorgino and Laura Grassi, respectively, professors of Financial Markets and Institutions and Investment Banking at the Politecnico di Milano. “Being the reigning champions and winning the Italian finals for many years now has generated some pressure and expectations, but this motivates students to give their best. Now, however, a new challenge awaits us and the goal will be to proudly represent our Department of Management, Economics and Industrial Engineering and the Politecnico di Milano at EMEA level“.

“CFA Society Italy, in its many years of activity, has built an intense relationship with Italian universities to promote the principles of integrity and professional excellence among the younger generations“. Giuseppe Quarto di Palo, CFA, Director of CFA Society Italy and coordinator of the CFA Research Challenge in Italy, said: “We are happy to be able to offer universities and their talents the opportunity to compete in a realistic competition, aimed at reproducing the experience of an equity research department of asset management companies or investment houses. We also offer scholarships to the best students to access the CFA Program, in order to obtain a globally recognized certification in the financial industry“.

“This initiative makes it possible to achieve some important objectives in the field of education and academics. First, it is to bring students closer to the labor market by combining academic knowledge with the techniques and tools used by professionals in the financial sector. The second objective is to highlight our Italian university excellence at European and Global level“, commented Giancarlo Sandrin, CFA, President, CFA Society Italy. “This project could not exist without the valuable contribution of the association’s volunteers and the partners who supported the initiative like FactSet, Fidelity International, Kaplan Schweser, PwC Italia and Ferrari, the Maranello-based company being researched by students“.

“FactSet is extremely pleased to have supported CFA Research Challenge in Italy for the fifth year in a row by offering our analytical platform to students, professors and mentors“, mentioned Dorin Agache, Account Manager & Academic Sales at FactSet. “One of our main goals is to bridge the gap between the university and the labor market by enabling all participants to have access to the tools and market data needed to fully simulate the profession of financial analysts. Our warmest congratulations first go to Politecnico di Milano, which will continue the competition towards the EMEA title, but also to all the other universities that invest time and resources to improve the quality of teaching and believe in the development value of this extraordinary initiative organized by CFA Institute.”

 

 

Master Financial Technology with an MSc Fintech Degree

Posted on | by albe@mip.polimi.it | Leave a Comment on Master Financial Technology with an MSc Fintech Degree

Business schools are racing to offer masters degree programs in financial technology (fintech), as employer demand skyrockets for professionals who can use tools like artificial intelligence to boost financial institutions’ efficiency, generate new products or services for them, and help the big firms avoid being disrupted by nimbler startups.

And despite knowing that it is risky to offer a course on volatile and controversial markets such as cryptocurrencies (for example), as they could disappear as quickly as they emerged, schools are enhancing their brands with the fintech offerings, as students and employers demand them.

“I think a course in fintech was a must,” says Emilio Barucci, director of the International Master in Fintech, Finance and Digital Innovation at MIP Politecnico di Milano in Italy, in order to maintain MIP’s status as a leading technology university.

[…]

An increased demand for fintech skills

Business schools say the catalyst for the introduction of fintech courses has been high and growing demand among finance employers for trained professionals, who can use digital technologies, such as data science techniques.

[…]

Across the world, financial services firms are struggling to attract talent with a mixture of business smarts and technical acumen. In a recent employer survey by Hays Financial Markets, a recruitment firm, 61 percent said they faced moderate to extreme skills shortages, with technology among the most sought-after skills.

[…]

The demand is global. According to a 2018 report by the Monetary Authority of Singapore (MAS), 7,800 jobs were added to the fintech and financial services sectors in 2016-2017 in the city-state, with fintech alone contributing close to 2,000 net jobs, far exceeding a target set by the MAS.

[…]

However, financial institutions’ automation of some activities, has raised concerns that jobs could disappear as a result. A Citigroup report forecasted that fintech could cost almost 2m bank employees their jobs over the next decade.

So far, displacement has mostly affected staff in banks’ brick-and-mortar retail branches, as banks do more online and cut branches, and staff in “back office” functions, such as those working in settlements, who make sure that payments are processed.

Technology could free up “front office” workers, such as investment bankers, to do more interesting jobs. For example, several investment banks use AI to help determine the best way to execute big trades by reading market conditions. The AI comes up with the trading optimization strategy, but it’s validated by humans. In one case, the method achieved annualized returns that outperformed a benchmark index.

[…]

How MSc Fintech courses are keeping pace with the industry’s rapid change

But what exactly should be taught in fintech masters programs and who should teach it? With the field evolving so quickly, how are academics keeping pace with market developments?

[..]

MIP uses case studies in its fintech masters program that were developed by companies such as Aviva, Deloitte and IBM. “The companies help us in updating the course according to the evolution of the industry,” says Barucci.