AIM Italia - Ernesto Mocci - Methorios Capital

Potential investors for AIM Italia and MAC‣ As fore mentioned earlier this section there are currently very few institutional investors investing in AIM Italia or MAC listedcompanies.‣ As current regulation stand, UCITS funds are able to invest up to 10% of their assets under management in MTF/exchangeregulated listed companies. Unfortunately there are very few who are utilising this allocation instead opting to invest in othermarket segments due to either a) the issue of liquidity, b) the fact that they are unaware of the regulation or c) being older fundsthat do not incorporate MTF investment into their fund bylaws.‣ There are specific approaches to perhaps increase the presence of institutional investors on AIM Italia and MAC:• It is possible to approach the Chief Investment Officers (CIOs) of the asset management companies, who if interestedcould request the Compliance officers to amend a specific funds investment bylaws to incorporate MTF equities.However there is the issue of convincing the Portfolio Managers (PMs) or Fund Managers (FMs) the value of investingin specific companies on the MTFs.• The other method is perhaps to approach directly the FMs or PMs and create interest with ihthem in various investmentcases of companies on an MTF(s). Who could potentially put pressure on their CIO’s or Compliance officers to enablean asset allocation to MTF listed companies. However in the current environment where macro considerations havedominated investment behaviour, it is difficult to entice fund managers to companies on the AIM Italia or MAC markets.‣ Many PM/FMs, having seen the success of AIM UK, believe the AIM Italia MTF is agoodidea to serve the needs of theimportant small cap companies of Italy. However they would prefer someone else tests the water before them and of coursethere needs to improved liquidity. The entry of more companies onto the MTF’s that have solid equity stories, decent marketcaps and float sizes could bring a significant change to investment sentiment from fund managers.‣ At this point in time the only visible institutional fund managers that have invested in AIM Italia or MAC listed companies areLemanik(LemanikHighGrowthFundhas/hadaholdinginTBS) and Dimensional Funds (European Small Companies Fundhas/had a holding in Neurosoft), otherwise nearly all Italian/Pan European small cap funds have avoided the two MTF’s.‣ From disusing the matter with various fund managers in Italy and abroad it is difficult for them to focus resources on the ItalianSmall caps, a market that requires a great deal of ground work for the analyses of companies and understanding therelationships of the Italian majority shareholders of the listed companies.24