One of the most interesting asset managers in Europe has made it to America.

Lingotto Investment Management, with $6 billion in assets under management, has generated plenty of intrigue in its short existence. It was formed in 2023 by Exor, the holding company for the wealth of the Agnelli family, which owns Fiat, Ferrari, The Economist, and the Italian soccer team Juventus.

Lingotto launched as an investment house giving tenured portfolio managers a sleeve of capital and free range to invest — some bets include a private German robotics company and CBS's parent company, Paramount. The firm, which was founded by the billionaire Agnelli heir John Elkann and whose chair is former UK Chancellor of the Exchequer George Osborne, has raised billions in outside capital and is operated separately from Exor.

Now the manager is expanding to New York, where it already has 14 employees, including investing talent, on the ground. The 50-person firm, based in London, considers New York and London to be its "two pillars," Enrico Vellano, Lingotto's CEO, said in an interview with Business Insider.

"The idea is to continue to grow and invest in the US but also in the UK," he said.

The firm has lured in James Anderson, a star tech investor and former Baillie Gifford partner, and BlackRock executive Pam Chan to run different strategies. Matteo Scolari and Nikhil Srinivasan, two longtime Exor-connected investors, manage their own books.

The investors' focuses are across the board — limited-partner stakes in other funds, public tech companies, quirky private opportunities — and they can pursue their ideas on their own timelines, which can be yearslong, without constant tinkering from a central risk manager or overarching investment commitment. This proposition has been enticing to portfolio managers as well as prospective backers.

"Each team is empowered and very independent," said Scolari, whose ties to the Agnelli family go back a generation to when his father worked as the head of research and development at Fiat decades ago. In an interview with BI, he said the structure set the firm apart.

"I think that's really important — I really believe in this approach," he added.

A different model

The firm doesn't like the word "platform," but it's impossible to avoid comparisons between today's dominant multistrategy managers and Lingotto. These platforms have become some of the biggest names in alternative investing, in part because they can absorb so much capital from sovereign wealth funds and pensions and diversify it across dozens of investing teams.

The industry's biggest investors prefer multistrategy funds because of their consistency and lack of volatility, which they achieve through tight risk limits and short-term investment horizons.

Lingotto employs multiple investors who operate quasi-independently of each other, like Citadel and Millennium. But the similarities between Lingotto and the biggest hedge funds end there.

At Lingotto, the ultimate authority over its four strategies lies with the heads of said strategies. There's no firmwide chief investment officer but four different CIOs.

"I really liked the idea of the autonomy," Anderson said in an interview with BI. He runs the firm's $700 million innovation strategy alongside Morgan Samet, the strategy's cohead who used to work for the value-investment shop Pzena and the private-equity firm THL.

The innovation team plans to invest in companies across their life cycle, including when they are private, and hold them through volatile patches.

"You need to be prepared to suffer," said Anderson, who was an early investor in Tesla and Amazon and a big believer in Nvidia's potential.

"Where we earn our returns is by being supporters of these companies during their downturns," he added.

The long-term nature of the firm's capital, thanks to Exor's role in the formation of the company, allows Anderson and Samet — and the firm's three other strategy heads — to worry less about short-term gains and more about long-term ideas.

"We're not scared of volatility," Samet said.

"We see that as more of an opportunity, " she added.

Agnelli, through and through

While the firm wants to be viewed as more than just the investment arm of the Agnelli family — and already has outside capital from the French insurer Covéa — Lingotto is the brainchild of Elkann, the billionaire heir.

In a public letter after the firm launched, Elkann quoted the 18th-century philosopher Adam Smith to stress how his family would be investing alongside any outside capital.

"Above all, we think and act as principals rather than agents," he wrote. Lingotto, named after an iconic Fiat factory in Turin, Italy, with a rooftop test track that began operations in 1923, plans to grow through "performance rather than capital inflows," he added.

The first to run strategies for the firm were a pair of longtime family connections, Scolari and Srinivasan, who now run the intersection and horizon strategies, respectively. Scolari previously worked for Eton Park, the now shuttered hedge fund founded by the former Goldman Sachs partner Eric Mindich, and has run money for the Agnelli family since 2014.

Srinivasan, meanwhile, was the chief investment officer at Allianz Investment Management and an HPS partner before joining Exor in 2018.

The pair have very different strategies — Scolari runs a concentrated book of public equity longs and shorts, while Srinivasan manages a portfolio of other funds as well as direct investments into private companies — but similar experiences working at the firm.

Without the pressures of managing a business, the two chief investment officers can focus on their main job: investing.

"You have a pool of capital, you have trust from the LPs and GPs, and you have clarity for what you're supposed to be doing from an investment point of view," said Srinivasan, who invests in companies around the globe and spoke with BI from Singapore.

"The stresses created are our own stresses," he added.

People-focused buildout

With the firm's momentum and burgeoning reputation, it might seem like the next step would be a significant hiring spree to grow the ranks even further.

While Lingotto's leaders are always looking for top people, Vellano said the firm wanted the right people for the structure, not just more people.

Chan, a former BlackRock private-markets executive, is an example.

Chan, who is based in New York and runs the mosaic strategy, said her portfolio was focused on the parts of the private markets that don't fit neatly into the buckets of the biggest private-asset managers. Right now, for example, she's got her eyes on the content industry, including nontraditional players like YouTube creators.

"Novelty is a big part of what we do," she said. She was early into the music-rights business, something massive asset managers like KKR have now gotten into. She focuses on areas where there's a "capital demand-supply imbalance," a time-intensive strategy that requires her and her team to scour the market for deals.

She said Lingotto's structure gives her the bandwidth to do that by "allowing investors to invest."

It fits neatly into Vellano's vision.

"We will remain a boutique" that focuses on "quality investors and LPs," he said, adding: "It's important we have that alignment."

• BlackRock has agreed to buy private credit firm HPS Investment Partners.
• HPS is another major private markets deal for the $11.5 trillion money manager.
• BlackRock, known for its ETFs, is hoping a shift to private markets will drive growth.

Larry Fink is looking to close 2024 as he started it — by announcing a big acquisition that brings BlackRock closer to dominating private market investing.

BlackRock is set to buy HPS Investment Partners, a private credit behemoth managing $148 billion, in an all-stock deal worth around $12 billion, the firms announced Tuesday.

Fink, BlackRock's chief executive and cofounder, who built the world's largest asset manager with $11.5 trillion in assets by packaging public markets into cheap funds for the masses, has been very vocal about the firm's push into the profitable private markets.

This shift in strategy could lead to a more valuable BlackRock, which might just be enough for Fink, who turned 72 last month, to finally pass on the reins to his yet-to-be-named successor.

In January, the firm announced that it would buy private equity firm Global Infrastructure Partners, with about $170 billion in assets, for about $12.5 billion in cash and stock. The deal, its biggest one since it bought Barclays's asset management business in 2009, closed in October. In June it agreed to buy data giant Preqin, which it hopes will help bring some of these more complex private strategies to a broader audience.

In addition to the HPS talks, the FT has reported that BlackRock is eyeing a stake in Izzy Englander's $70 billion hedge fund Millennium Management.

BlackRock is not new to reshaping itself through acquisition. The Barclays deal gave the firm iShares and helped it become the passive investing giant it now is.

"I do not want us to be comfortable in our business model," Fink said during the firm's investor day last summer. "I want to make sure we're questioning our business model and we are focusing on how to best serve our clients, and if we truly believe there is some great need that we need to do, we are going to reimagine who we are in our business model."

Acquiring HPS could be another "transformational" deal for the company, helping it reach the same scale it has public equities and bonds in private markets. HPS will push its alternative assets to more than $600 billion.

BlackRock's private credit business will now have a combined $220 billion in client assets. The deal is expected to increase private market fee-paying assets under management by 40% and management fees by 35%, BlackRock said.

Meet HPS Investment

HPS was founded by CEO Scott Kapnick, Goldman Sachs' former head of investment banking, along with Scot French and Michael Patterson in 2007 as a unit within JPMorgan called Highbridge Capital Management. Principals from the firm bought it out in 2016 after the bank's appetite for high-risk loans waned.

The three will now join BlackRock's global executive committee and lead a new unit combining HPS and BlackRock's existing private credit business.

The secretive firm has been at the forefront of the private credit boom, which resulted from the 2008 financial crisis and banks' withdrawal from risky lending. Private players moved in to make loans to companies when Wall Street giants were reluctant to.

"Our competitors refer to us as the nerds of private credit and we take no offense," French told Bloomberg in an interview last November.

The firm, which was previously working toward an initial public offering, caters to mostly institutional investors and has more than 760 employees in offices around the world, according to its website.

How it fits with BlackRock's ambitions

BlackRock brought in more assets in the third quarter than ever before, mostly down to its index funds, but in its October earnings call the firm's leaders were already focused on its future growth engine — GIP.

GIP is expected to add $250 million in management fees in the fourth quarter alone.

"This is a revenue growth story," Martin Small, BlackRock's chief financial officer said during that call." Private equity and credit investments are much more expensive than BlackRock's usual roster of funds and are in high demand from institutions like pensions and endowments as well as ultra-wealthy investors.

While BlackRock has long had an alternatives investing unit, until recently, its private markets assets were meaningfully smaller than those of the main players in the space, such as Apollo and KKR.

It's tried growing through acquisition in this space in the past. In 2018, BlackRock bought a small credit manager, Tennenbaum Capital Partners, which at that time had about $9 billion in committed client capital, but saw a number of investment professionals exit.

BlackRock expects the private debt market to more than double to $4.5 trillion by 2030.

While private credit's high yields and returns have increasingly attracted wealth managers and institutions alike, the deal will likely strengthen relationships with insurance firms, which have a longer investing horizon.

Ana Arsov, Moody's Ratings global head of private credit said the acquisition is "catapulting" BlackRock into the ranks of the top 5 private credit managers and significantly advances its private-market growth goals.

"Blackrock's large installed base of insurance client assets offers a prime opportunity to cross-sell HPS's capabilities, Arsov said. "Additionally, BlackRock's extensive distribution network of institutional investors and wealth managers opens new markets for HPS."