RPT-Ahead of Brexit, tax perks tempt Italian bankers back to la dolce vita

RPT-Ahead of Brexit, tax perks tempt Italian bankers back to la dolce vita
From Reuters - September 16, 2017

(Repeats story published on Friday)

* JPM, Goldman seek bigger offices to house new arrivals

* Goldman Italy co-head among London bankers moving to Milan

* Charterhouse, Cinven, Advent bulk up Milan operations

* Tax perks, cheaper homes, fine food among enticements

By Pamela Barbaglia and Stephen Jewkes

LONDON/MILAN, Sept 15 (Reuters) - Italian financiers who handle some of their countrys biggest deals out of London are moving to Milan, lured by bumper tax breaks at a time of deep uncertainty about Brexit, sources familiar with the plans said.

Investment bankers making the switch include Goldman Sachs co-head of Italy Francesco Pascuzzi, who also co-heads the global power and infrastructure team, and is looking to move early next year, the sources told Reuters.

Goldman and JPMorgan have started looking for new offices in Milan as their current bases, in the bustling heart of Milan, behind La Scala theatre, are too small to house those seeking to relocate.

Goldman has about 20 people on its payroll in Milan - Italys financial capital - but expects headcount to double by 2019 as a result of Italian bankers returning from London, said the sources who declined to be named as the plans are confidential.

JPMorgan, which has a much bigger presence of about 160 staff, aims to significantly increase that number, they added.

Hiring bankers from London used to be hard, no one was too keen to relocate as London was the place to be in finance. But things have changed, said Leopoldo Attolico, the Italy country manager for Citi, which has 200 Milan staff and expects some workers to seek relocation from London.

Now there is a sense of insecurity among non-UK nationals working in London and we have seen more interest in relocating to Milan, also thanks to new fiscal incentives.

For those returning, Italy is offering significant perks, including a 50 percent income tax break. There is no mass exodus, however, with only dozens of Italians choosing to relocate so far.

But the shift points to a growing fragmentation of the European investment banking sector, which has been almost exclusively concentrated in London for the past 20 years.

As Brexit nears, more financiers are expected to shift to their home countries or to other financial hubs like Frankfurt and Paris. This would increasingly spell the end of a model that has allowed banks to streamline operations and costs by covering European markets out of Britain.

You dont move back to Italy to get a tax break, but its a good incentive when youre thinking about your next step, said former DBAY investment adviser Raffaele Petrone who returned to Italy in February to join private equity firm Armonia SGR.


Antonino Mattarella, nephew of Italian president Sergio Mattarella, is also among bankers making the switch. In February the 38-year-old, who spent 12 years in London at Goldman Sachs, became Bank of Americas Italy head in Milan.



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