10 -16August 2000

Partnership with BOV very successful - Rothschild CEO

by Franco Aloisio

The partnership between Rothschild Asset Management and Bank of Valletta over the past years has been very successful, Rothschild CEO Paul Manduca said in an interview with The Malta Business Weekly. Mr Manduca, who was recently appointed CEO of Rothschild Asset Management, is of Maltese descent. Rothschild manages and advises on an extensive range of investments on behalf of individuals and institutions totalling US$45bn.

The partnership between Rothschild and BOV started five years ago with the setting up of Malta's first fund management company - Valletta Fund Management, a subsidiary of Bank of Valletta.

Mr Manduca said Malta has made a lot of progress in financial services in the past few years.

"Rothschild's joint venture with Valletta Fund Management has been highly successful. The Maltese company's performance has been reasonably good," Mr Manduca said.

"What we are trying to do in Malta is to recognise that the country can be both an offshore financial centre and also a centre which retains some of its business for itself. We want to create real value in the Maltese islands."

As to investment potential of Maltese companies and individuals, Mr Manduca said the net worth per capita of the Maltese is very high. He added that the only difficulty in Malta was the restrictions imposed in the past on investment.

"However, in Malta there are all the factors for a fully functional financial services centre. There has always been a well trained workforce and the Maltese regulations are very understandable as they are based on British laws," he said.

On the future expansion of VFM, Mr Manduca said: "Rothschild would like to see the company expand by offering services around the Mediterranean rim. One plan is to internationalise VFM's operations. There is a lot of value and potential in North Africa, Turkey and the Middle East. There are strong cultural strengths between Malta and these regions, which could spill over into fund management."

Mr Manduca spoke also on how the partnership between BOV and Rothschild had started: "Everything had started when Rothschild's Channel Islands office had discussions with several partners around the world in order to establish a new partnership overseas. Rothschild has no distribution network for its products. Rothschild had opted for Malta as there was a good cultural fit."

On BOV, Mr Manduca said the bank is today more competent and outward looking. "It is a symbol of Malta, a truly Maltese bank," he said.

"However after an obvious difficult start, there has been an explosion in business for VFM in 1998 and 1999."

Mr Manduca said one of the reasons why Rothschild chose him to run its global business was to strengthen the company "It is a very old name. We need to be more ambitious and have a bigger role in fund management than we have today," he said.