asset management, wealth
management, and quantitative
research, GFG Lab. “With
statistics suggesting that robotic
input is behind between 60% and
70% of financial market activity,
we decided to create a department
dedicated to understanding this
phenomenon,” says Zavaglia.
“We built several quant-based
strategies, including an Active
Asset Allocation (AAA) model, that
help us anticipate market trends
using a systematic combination of
both quantitative and qualitative
inputs.”
While the Lab has brought a
new ingredient to the GFG mix,
wealth and asset management is
ultimately about client-customer
relations. “When you manage
money, you need credibility, and
when you obtain it, you are ready
F
or the past 10 years, the
global financial sector
has been under pressure
to comply with the increasingly
stringent levels of transparency
and professionalism demanded by
regulators. Monaco was one of the
first countries in the world to rise
to the challenge and has gained a
reputation within the industry for
probity and reliability. Today, this
tiny principality on Europe’s Cote
d’Azur has emerged as a magnet
for a growing number of niche
financial services companies.
One such company is Groupe
Financier De Gestion (GFG)
Monaco. Set up by two fixed-
income specialists from Deutsche
Bank in London who launched
their flagship fund Euro Global
Bond in 2011, GFG is now a
highly respected member of
Monaco’s financial services
community. Having started out
with $34 million in assets under
management, the fund reached
$482 million four years later.
Along the way it has won several
accolades, including a 5-star
rating from Morningstar in 2014
and the Lipper Fund Award from
Thomson Reuters in 2016.
“When we started, European
government bonds were
appreciating slowly and we were
able to create a product that gave
a good return to all our investors,”
says Stefano Zavaglia, president
of GFG. “It was a combination of
the right product at the right time
in the right market—and a bit of
luck.” The fixed-income market
has delivered above a 4.5%
annual return since then.
GFG has three business units:
GFG – A Fund with an Edge
Stefano Zavaglia President GFG
to step up into another dimension,
which for us means expanding
our international presence,”
says Zavaglia. Monaco, with its
strategic location and family-
friendly environment, will always
be home to GFG, but expect to see
more of its offices spring up across
Europe over the next 10 years.
T
hanks in part to its favorable tax regime, Monaco has
long been recognized as a glittering getaway destination
for the rich and famous. With the world’s second-
highest nominal GDP per capita, its residents have become
accustomed to making friends and influencing people in
the corridors of power around the world. Yet this all started to change in
the aftermath of the 2008 financial crisis and the subsequent international
pressure that came to bear on offshore jurisdictions and fiscal paradises.
Under the stewardship of HSH Prince Albert II, Monaco has risen to the
demands of transparency and probity to differentiate itself from the so-called
artificial tax heavens. The Monegasque government has led the way, and in
many cases was the first jurisdiction to implement the latest international
regulations in order to ensure the best possible future for Monaco.
One person who witnessed Monaco’s transformation over the past four
decades is Roberto Giorgi. A veteran of both the shipping and luxury
yachting industries, Giorgi is chairman of Fraser International, the world’s
leading luxury yacht service provider. “When I moved to Monaco in 1980,
it was a completely different place,” says Giorgi. “Today, there is much
more governance around whatever you do, and everything has to be done
in accordance with the highest international standards of due diligence and
transparency.”
Giorgi’s take on the current regulatory climate perfectly aligns with
the vision of HSH Prince Albert II to transform Monaco into a model
state dedicated to the protection of the environment and to sustainable
development. The Prince Albert II of Monaco Foundation was established to
implement and promote this vision both at home and abroad.
Monaco will still host world famous events like the Formula 1 and Monte
Carlo Tennis Masters tournament, but it will also now include the biennial
Formula E championship race for electric cars and the first all-organic
restaurant to receive a Michelin star. With the help of the Foundation, this
reach is expanding internationally through a range of public and private
sector initiatives in the fields of research, technological innovation and social
awareness practices.
What Monaco lacks in size and population it more than makes up for
in expertise and the highest standards in niche areas like luxury, yachting
and, increasingly, finance. With its dedication to sustainable development,
Monaco is on a path to becoming a global “soft power” and a perfect role
model for many small nations around the world.
MONACO
A Winning Strategy
CONTENT FROM THE INTELLIGENT INVESTOR
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