LONDON (Reuters) - U.S. asset manager Payden & Rygel said on Wednesday it had opened a first continental European office, in Milan, but did not expect to have to turn it into a formal subsidiary as Britain leaves the European Union.
The Los Angeles-based company firm, which runs $120 billion in assets, said it was opening an office to grow its client base in Italy, not as a contingency plan to protect access to European investors after Brexit.
The Milan office will be regulated out of London under the firm’s current MiFID financial ‘passport’, a state of affairs that EU politicians have said must change when Britain leaves the bloc in 2019.
“We’re quite confident that the right kind of deal will be done that will allow passporting, or a version of passporting, to continue without the need to establish a new MiFID firm,” Managing Partner Robin Creswell told Reuters.
Despite that, Creswell said the firm had draft applications ready to establish MiFID-compliant firms in a range of locations, if needed, without elaborating on when a decision would be made.
Payden, which has 26 staff in Europe, currently manages around $1.5 billion in assets on behalf of Italian clients and is looking to expand into servicing other local institutions.
The Italian office will be led by ex-Morgan Stanley banker Nicolo Piotti, with three further hires set to start over the next six weeks, and the local presence and language skills would help the firm establish better relationships with new clients.
The ease of access to other parts of Europe from Milan also supported the decision to open an office there, as did the cheaper cost of office space and access to talent as tax changes encourage professionals to move back to Italy, Creswell said.
Reporting by Simon Jessop, editing by Dasha Afanasieva