Equita
Insights

IR Survey: Management commitment

Milan, 26th January 2021 – We are always keen on helping investors to better understand the Equita investment case. For this reason, the Investor Relations team is happy to provide to the financial community some insights that could be helpful to assess the right value of the Equita stock (EQUI:MI).

Today we focus on “Management commitment”, the option you voted in December with 11% of preferences in our LinkedIn survey (https://www.linkedin.com/company/equita).

Enjoy your reading!

The Investor Relations team

 

IR Equita - The importance of the management commitment

The Equita management team has always been driven by an entrepreneurial approach and invested in the share capital of the company. Management is a key component of the success of the Group, therefore is important to know it well.

The topics we discussed in the past two weeks (“Diversification and resiliency”, “Flexibility of cost structure”) and the next induction session scheduled for next week (“Cash generation and dividends”) are strictly linked to the decisions of the management team, its strategy, its commitment and its execution capabilities.

Let’s see it more in detail.

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The Equita “partnership” and the alignment of interests

Sondaggio IR Follow up Management commitment
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The management team of Equita has a long-standing expertise in the financial industry and a significant seniority within the company. This seniority is favoured by stimulating internal policies adopted at Group level that contribute to develop, enhance and incentivise all professionals.

Equita is first of all a “partnership” where clients’ interests stay above all and where all managers and employees contribute actively to value creation.

In this partnership, commitment is guaranteed by the significant participation of the management into the Company’s share capital: management and employees are the largest shareholder with a 55% stake (69% if we consider only voting rights)[1]. Moreover, in 2019 the management team signed a new shareholders’ agreement (that substituted the precedent agreements) to renew lock-up commitments till 2022.

The direct involvement in the share capital is therefore a strong incentive for all managers and employees, and let the Group’s professionals to actively participate to results and benefit from dividend distribution.

As a result, management is clearly committed and its interests are fully aligned with the investors’ ones.

 

[1] Each share has one voting right. The shareholders that comply with specific holding period requirements shall ask to the Company to be enrolled in the registry of the shareholders with increased voting rights. For more details, visit the Corporate Governance section.

 

Execution capabilities

It is worth well remembering that the management team has a solid track record in coping with challenging market situations and praises excellent execution capabilities.

The management – for instance – successfully coped with Mifid II transition: the team limited the negative impacts of the new regulation and strengthened the Group's market positioning, confirming Equita as the leading independent broker in Italy.

The management team also successfully integrated two M&A transactions in the last three years: the first in 2018 with the acquisition of a branch active in primary markets, brokerage and market making activities from Nexi, the second in 2020 with the acquisition of Equita K Finance, a leading M&A boutique in Italy active in the mid-market segment.

Management has also invested in several initiatives to improve business diversification and expand the Group’s product offering. The launch of the Alternative Asset Management division in 2016 (that today count approximately €1 billion of AuM) and the establishment of a new fixed income desk in 2018 (that today trades on behalf of clients about 7% of bonds exchanged on the Italian markets) are clear and successful examples of this strategy.

 

Conclusion

Financial literature confirms that expert and highly committed management is necessary condition to lead companies to success: a good management team can achieve excellent results and make work the entire corporate “machine”, also in challenging situations; obviously, the opposite is not true: a less prepared and less-involved management team will face much more difficulties.

Therefore, given the positive track record, the strong commitment, the entrepreneurial approach adopted and the presence in the share capital of the company, the Equita management is a credible reason to invest in the stock (EQUI:MI).

Follow Equita onLinkedIn to get our updates (https://www.linkedin.com/company/equita).

#Equita #IR #WeKnowHow

 

 


[1] Each share has one voting right. The shareholders that comply with specific holding period requirements shall ask to the Company to be enrolled in the registry of the shareholders with increased voting rights. For more details, visit the Corporate Governance section.