Generali Adriatic Value Fund concluded the sale of two properties: Stekleni dvor and Tivoli Center

 

The Stekleni dvor complex is located in a prime location near the Ljubljana ring road. It consists of two separate office buildings connected by a shared underground garage. The southern tower features a three-level underground parking area, a ground floor, mezzanine floors, and eight additional floors, totaling 8,700 square meters of rentable space.

The Tivoli Center office building is situated in the heart of Ljubljana, offering approximately 7,700 m² of gross leasable area (GLA) across two interconnected buildings.

The buyer of both properties is Agromarket Logistic d.o.o., based in Kragujevac, Serbia.

These transactions represent the second and third property sales for the Generali Adriatic Value Fund, managed by Generali Investments in cooperation with the international real estate private equity firm Peakside Capital. The fund’s investment objective is to deliver returns to investors through rental income and capital appreciation by investing in commercial real estate.

Following successful management, the fund is now in its final phase, focused on asset divestment and the realization of investor returns in line with its original strategy.

 

Generali Investments raises awareness about clean groundwater and using natural resources responsibly  

 

Generali Investments has successfully concluded its campaign ‘Venture into the secret universe of water and name two olms’. Running from 20 August to 13 October 2024, the campaign aimed to highlight the vulnerability of our groundwater and the importance of using natural resources responsibly. With over 1,250,000 Slovenian web users reached and more than 78,000 interactions generated, the campaign is a result of our commitment to fostering positive change, beginning with small acts.

 

 

In collaboration with the Postojna Cave as part of the Protect Proteus Project, we are proud to sponsor two olms, a symbol of how precious clean groundwater is – a resource that supplies drinking water to 97% of Slovenians. The olm, a marvel of nature and a symbol of environmental sensitivity, can survive only in the cleanest water – reminding us that preserving clean water resources is vital for our future.

From more than 3,600 online suggestions and more than 500 additional suggestions on social media, we selected the names Kapljica and Kras. These names, proposed by different participants, embody both the unique qualities of this remarkable creature and the values upheld by Generali Investments.

  • Kapljica: Meaning ‘Droplet’ in English, the name Kapljica symbolises water, which is essential to the olm’s survival. The name also conveys something small yet vital, highlighting the sensitivity and beauty of the olm’s habitat and its gentle nature. A droplet embodies purity, life and the power of small actions. Just as one droplet can trigger significant change, a single act to preserve nature can have an impact on society at large. Living in clean groundwater, the olm illustrates the importance of our commitment to protecting drinking water and managing natural resources sustainably.
  • Kras: The name Kras connects the olm to its natural environment, the Kras region, known for its distinctive karst phenomena such as caves, karst underground and subterranean waters that olms depend on. With its unique water systems, subterranean rivers and sensitivity to pollution, Kras symbolises the importance of environmental protection and clean groundwater preservation, essential for life in Slovenia.

Both names, Kapljica and Kras, capture the essence of the olm and the importance of responsible behaviour. These names align our commitment to protecting natural resources with our mission of creating a responsible future. They embody the values that Generali Investments promotes – values that will impact future generations.

Who is the olm?

The olm, or ‘human fish’ (Proteus anguinus), is a fascinating cave-dwelling creature found in the underground waters of the Dinaric karst, including the karst systems in Slovenia. It is the only European amphibian adapted to life in total darkness underground. Without eyesight, its other senses are highly developed. Surviving only in the cleanest underground waters, the olm is a powerful symbol of ecological sensitivity and sustainable management of water resources. Just as the olm requires a clean environment to survive, humans depend on preserving clean water for our health and future.

Positive impact of the campaign

“70% of our planet is covered by water, but only 0.007% is in the form of accessible drinking water.” This is one of the key facts that was central to our campaign. Most of the world’s water is in the oceans, and less than 3% of global water is freshwater. Of this fresh water, the majority is locked in glaciers and permanent snow, and less than 1% is drinking water. Although water is abundant, access to drinking water is limited. Slovenia is fortunate to enjoy the privilege of clean drinking water, and it is our duty to preserve this precious resource for future generations.

At Generali Investments, we believe that raising awareness can drive significant change. Through our campaign, we aim to inspire greater responsibility in environmental protection and encourage positive action for the sake of the planet. Just as a droplet of water shapes rivers, small local acts can contribute to global change.

Our commitment to responsible behaviour is not only an essential part of our mission, but also of our vision: to create a better world through responsible investment and raising awareness about the protection of resources that will sustain life for generations to come. Join us in this journey by investing in Generali Umbrella subfunds. Learn more HERE.

 

 

Generali Investments concluded the sale of Austria Trend Hotel

 

The Austria Trend Hotel is located in a prime location, in the immediate vicinity of the Ljubljana ring road or connection to AC. The hotel has 214 rooms and 12 suites. Inside the hotel there is also a restaurant, lounge, wellness with saunas and fitness, 11 conference rooms, parking spaces are also available in front of the hotel and in the garage under the hotel. The buyer is Agromarket d.o.o., Kragujevac.

Generali Adriatic Value Fund, a special investment fund, is an alternative investment fund with the recognized status of a special investment fund. The fund’s objective is to achieve income and capital growth through investments in commercial real estate.

Sincerely,
Generali Investments LLC

 

 

 

Generali Investments again with the Best Asset Manager in Slovenia

 

Aleš Lokar, the head of the portfolio management team in charge of the Generali Umbrella Fund subfunds Generali Galileo, Generali Global and Generali Rastko, with a total of EUR 225 million under management, previously clinched the best fund manager title in 2017. On this occasion, he said: “This accolade is the result of the outstanding efforts of the entire Generali Investments team. The market complexities and rapid developments make effective teamwork indispensable. Therefore, this recognition belongs to each and every one of my colleagues.”

 

Aleš Lokar, head of equity investment management and Best Asset Manager; Foto: © Jure Makovec / Moje finance

 

David Zorman, who won the prestigious Best Asset Manager title in 2011, also made it among the five best asset managers in Slovenia this year.

Over the course of the 14-year history of these awards, Generali Investment managers won the Best Asset Manager titles an impressive eight times. This achievement firmly establishes Generali Investments as one the most acclaimed asset management companies in the history of the awards, underscoring the unwavering performance demonstrated by its manager teams. The Best Asset Managers by years were: David Zorman (2011), Primož Cencelj (2014, 2016 and 2018), Aleš Lokar (2017), and Luka Flere (2019). Additionally, Primož Cencelj was honoured with the title of the Best Asset Manager of the Decade (2010–2019).
The key criterion for determining the best manager is the consistent outperformance of the relevant fund they manage in comparison to the benchmark. Generali Investments, celebrating its 30th anniversary this year, ranks among the oldest asset managers with long-standing tradition and experience in Slovenia. Throughout its history, it has won numerous domestic and international accolades for its high-quality work, excellent asset management, and product and service development.

At this year’s event, stars were assigned to funds based on their performance over three-year and ten-year periods, representing the highest distinction in the mutual fund industry and expressing unparalleled excellence in fund management.

This year’s top awards – five stars – went to the following funds:

Generali Galileo*****, Mixed Flexible Fund, in the Mixed Global category over a three-year period,

Generali Rastko*****, Equity, in the Equity – Europe category over a ten-year period,

Generali Bond*****– EUR, in the European Bond category over a ten-year period.

 

Melita Rajgelj Ozebek, the President of the Management Board of Generali Investments, said: “The accolades received, along with the performance rates yielded by our funds, underscore the excellence of our management team, of whom we are immensely proud. We work in a rapidly changing environment that necessitates us to adapt on a daily basis, and this is where our long-standing experience proves invaluable. Over the past 30 years, we have always known the paramount importance of quality in asset management. We remain steadfast in our commitments to honour the trust bestowed upon us by our investors, and we thank them for their trust on this occasion.”

The numerous awards received, and, most importantly, the trust placed in the company by its clients, its long-standing relationships, prudent investment policy, high-quality products, top-notch team with a winning mindset, as well as professionalism and international focus, are certainly the motivating factors driving the oldest asset management company in Slovenia and its team. They also serve as proof that Generali Investments is on the right track.

 

From left to right: Geza Norčič, asset manager, Matej Krajnik, analyst, Sašo Šmigić, member of the Management Board, Aleš Lokar, head of equity investment management and Best Asset Manager of 2023, David Zorman, head of ESG analysis, and Matej Škerlep, analyst (missing: Beti Bacetič Kern, asset manager, and Grega Meden, senior asset manager).

 

Generali Investments celebrated its 30th anniversary with a conference focused on the main challenges facing investors in Slovenia

 

The panellists at the roundtable discussion – Prof. Dr. Aljoša Valentinčič from the School of Economics of the University of Ljubljana, Ms Melita Rajgelj Ozebek, President of the Management Board of Generali Investments, Mr Primož Pinoza, Deputy Director of the Securities Market Agency, Mag. Žiga Hieng, President of the Management Board of Salus, d.d., Mr Primož Cencelj, Executive Director of the Asset Management Division, Modra zavarovalnica, d.d., and Mr Karel Lipnik, analyst at the Delo media company – concurred that the financial assets of an average Slovenian lack diversification. This deficiency, they agreed, hampers the potential long-term growth of individuals’ financial assets and also the overall prosperity in Slovenia.

 

Participants of the round table with the moderator, prof. dr. Aljoša Valentinčič, Faculty of Economics, University of Ljubljana (from the left to right): Mrs. Melita Rajgelj Ozebek, CEO of the Generali Investments, Mr. Primož Pinoza, Deputy Director of the Securities Market Agency, M.Sc. Žiga Hieng, President of the Management Board Salus, Mr. Primož Cencelj, Executive Director of the Asset Management Sector Modra zavarovalnica, and Mr. Karel Lipnik, Analyst at Media house Delo.

 

Slovenian households primarily hold their savings in banks – at the end of November 2023, household deposits totalled EUR 29.0 billion. This is very likely the result of inadequate financial asset management strategy, very conservative saving habits among older generations, and negative experience during the last financial crisis.

Melita Rajgelj Ozebek, President of the Management Board of Generali Investments, said: “Over the long term, investors maintaining a basic mutual fund portfolio comprising 30% bond funds and 70% equity funds could realise a return of 30% on their initial investment within five years and around 60% within 10 years.”

The preference for keeping money in banks, at home, or in bonds rather than in mutual funds or the stock exchange results in opportunity loss. Primož Cencelj, Executive Director of the Asset Management Division at Modra zavarovalnica, estimates this loss to be in the billions, attributable, on the one hand, to inflation, and on the other hand to the returns from capital markets. “Slovenian savers have failed to actively participate in capital markets over the last 10 years, yielding an opportunity loss of EUR 10 to 15 billion.”

Prof. Dr. Aljoša Valentinčič said: “Capital markets are important in several ways. They are very important for companies to access cheaper and diverse sources of capital, to be used for developing products and services. Capital markets are also very important for savers to achieve better long-term objectives through smart and diversified allocation of their savings. Both companies and individuals are supported by financial intermediaries, including asset management companies and mutual finds, while the regulator’s role is to maximise transparency and minimise risk. Every one of us who can contribute to higher yields for individuals and benefits for the society at large plays a role in this network.”

While Slovenia is among the top European countries in terms of the saving rate, Slovenians are still reluctant to invest in mutual funds and capital markets, despite the many advantages of this type of investment.

Karel Lipnik, an analyst for the Delo newspaper, underscored the multiplier effects of people actively investing in capital markets for the entire country: “If an individual had invested their employer’s contribution in equities at the Ljubljana Stock Exchange over the past 20 years, they would have invested one average gross salary per year, totalling a direct investment of EUR 37,000 (provided this money was invested in and retained at the Exchange). Today, the stock market value of those invested assets would stand at EUR 110,000, with dividends of EUR 3,800 earned in 2023 alone. Had pension saving schemes been introduced in Slovenia in 2000, significant economic development could have been achieved, including the ‘third development axis’. We would have eliminated the need to speculate about the timing of the first wind park as there would have been ample funds available. We would have three-lane roads and healthy public finance. If people in Slovenia, a country that pays about EUR 800 million in interest on its public debt, invested more actively in capital markets, the money for the interest on the country’s public debt would also stay within Slovenia, and we could afford an investment the size of the second railway track project every year.”

“Restoring the confidence of Slovenian investors in capital markets necessitates showcasing as many positive stories as possible. We can learn lessons from the recent government retail bond issue – i.e. both the state as the issuer, but also municipalities, which could issue municipal bonds, a sought-after financial instrument at the Ljubljana Stock Exchange in its initial times. It is important that investors learn how the capital markets work. Negative experiences are inherent to any capital market. Capital markets must be viewed as operating with a long-term perspective. In the short term, they are highly volatile. We Slovenians have a tradition of saving and hold significant amounts in bank deposits. On the other hand, we are also relatively inclined to speculation, especially the young generations investing heavily in cryptocurrencies. Young people must be educated as early as possible,” said Primož Pinoza, Deputy Director of the Securities Market Agency.

Companies are not sufficiently aware of the financing opportunities offered by capital markets. We should showcase as many success stories as possible, as Slovenia has witnessed both negative as well as positive stories. People must be informed more often about positive stories because it is success stories that attract the crowds. This is how Žiga Hieng, the President of the Management Board of Salus, summarised the story of NLB, which “went through a difficult period and various phases, to ultimately achieve a relatively successful privatisation, with a concept. The latter could be useful and suitable for other Slovenian companies, too. Following this avenue, with the current situation in the capital markets, we could attract additional investors or at least further motivate the existing ones with an IPO or SPO, similar to the engagement seen with government retail bonds.”

The panellists concluded the roundtable by agreeing that given the anticipated unfavourable demographic changes, the current discouraging system of saving for old age, and the significant gaps in the financial education and literacy of the Slovenian population (which impact both the younger generation, affecting their ability to distinguish between current and future consumption, and the older generation, whose savings allocation does not match the their retirement saving goals), it is high time for each stakeholder to assume their share of responsibility. This includes the general population, who should appropriately reallocate their savings.

 

Generali Investments has closed the sale of its stakes in the companies Generali Investments GP 1 d.o.o. and Generali Investments GP2 d.o.o., and the sale of its equity shares in Generali Investments CP d.o.o. k.d., transferring, as of 13 June 2023, the management of Generali Growth Equity Fund, a private equity fund, to a new manager, ALFI PE d.o.o.    

 

The finalised transaction and transfer of the Fund’s management to the new manager will not alter the Fund’s policy nor will it affect the Fund’s investors. The Generali Group continues to be the Fund’s second largest investor, after the European Investment Fund (EIF). To close the transaction, all the necessary approvals of the Fund’s bodies and regulatory authorisations have been obtained.

Generali Investments continues to manage alternative investment funds, including the very successful Generali Adriatic Value Fund, a real estate fund. Generali Group thus remains a strong supporter of the Slovenian economy, not only through its insurance and asset management services but also as an investor making direct investments in Slovenian companies. Moreover, Generali Investments continues to strengthen its asset management activities in Slovenia, standing by Slovenian investors as a partner in both asset management and financial advisory.

 

Generali Growth Equity Fund was founded in 2019 as part of the Slovene Equity Growth Investment Programme (SEGIP), which was launched upon the initiative of the SID Bank in cooperation with the EIF. It offers equity and quasi-equity financing to Slovenian SMEs and mid-cap companies. The SID Bank committed to contributing EUR 50 million of its own funds to SEGIP (without state guarantee), and the EIF has provided an additional EUR 50 million under the European Fund for Strategic Investments (with EFSI guarantee). By mobilising additional funding from other private investors through the SEGIP programme, overall investments for Slovenian companies exceeds EUR 150 million, which is 3-times the contribution of the SID Bank.

 

 

Generali Investments Slovenia signed an agreement to transferring the management of Generali Growth Equity Fund to ALFI PE

 

The transaction will not change the Fund’s policy neither will have any impact on the Fund’s investors. The Generali Group remains the Fund’s second largest investor, after the European Investment Fund (EIF). To close the transaction, approvals of the relevant bodies of the Fund and regulatory authorisations must be obtained.

Generali Growth Equity Fund, a private equity fund, invests in small and medium-sized companies with strong growth potential, offering them support for growth financing, capacity expansion, sales network building and new product development as well as the acquisition of competitors and management of succession matters. Its investment portfolio consists of investee companies demonstrating a sustainability focus, a high level of development, keeping up with the latest trends and an extraordinary growth potential.

ALFI PE d.o.o. is a member of ALFI SKLADI, the largest group for alternative investment fund management in Slovenia, incorporating five different alternative funds with more than EUR 400 million of assets under management. ALFI PE d.o.o. also manages the largest private equity fund established in Slovenia, ALFI PE SIS k.d.

 

 

 

Generali Growth Equity Fund was founded in 2019 as part of the Slovene Equity Growth Investment Programme (SEGIP), which was launched upon the initiative of the SID Bank in cooperation with the EIF. It offers equity and quasi-equity financing to Slovenian SMEs and mid-cap companies. The SID Bank committed to contributing EUR 50 million of its own funds to this programme (without state guarantee), and the EIF has provided an additional EUR 50 million under the European Fund for Strategic Investments (with EFSI guarantee). By mobilising additional funding from other private investors through the SEGIP programme, overall investments for Slovenian companies exceeds EUR 150 million, which is 3-times the contribution of the SID Bank.

 

Generali Growth Equity Fund completes the acquisition of a share in Rolnet d.o.o.

 

 

Established in 2004, Rolnet d.o.o operates in the markets of Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Montenegro and Austria. Today, the company is a reliable partner in the sports nutrition industry and one of the leading specialised sellers of sports nutrition, health and wellness products in the region of South-East Europe. It develops and markets sports nutrition products and food supplements, focusing on sales in franchise stores, shopping centres, gyms, via online shops and through other distributors (retailers). The company owns the Proteini.si and Battery Nutrition brands, and has over the years gradually secured distribution and agency for the most established European brands of sports nutrition.

Through the equity investment of Generali Growth Equity Fund, Rolnet will be able to strengthen the further development of its services and their provision in the markets of the region.

Generali Growth Equity Fund is a special investment fund managed by Generali Investments, Slovenia’s oldest management company with subsidiaries in Croatia and North Macedonia. Generali Growth Equity Fund invests in ambitious small and medium-sized companies, offering support for growth financing, capacity expansion, sales network building and new product development as well as the acquisition of competitors and management of succession matters.

 

 

The Generali Growth Equity Fund investment in Rolnet d.o.o. is co-financed by the European Investment Fund and the SID Bank. Generali Growth Equity Fund was founded in 2019 as part of the Slovene Equity Growth Investment Programme (SEGIP), which was launched upon the initiative of the SID Bank in cooperation with the European Investment Fund (EIF). It offers equity and quasi-equity financing to Slovenian SMEs and mid-cap companies. The SID Bank committed to contributing EUR 50 million of its own funds to this programme (without state guarantee), and the EIF has provided an additional EUR 50 million under the European Fund for Strategic Investments (with EFSI guarantee). By mobilising additional funding from other private investors through the SEGIP programme, overall investments for Slovenian companies could exceed EUR 150 million, which is 3-times the contribution of the SID Bank.

 

 

Generali Growth Equity Fund closes the acquisition of a stake in Diverto d.o.o., Zagreb

 

 

Headquartered in Zagreb, Diverto was established in 2007 as a Comprehensive Information Security Provider. Since starting out as a pioneer in this field, it has grown to become one of the leaders within the region.

The company protects clients against security threats that can cause data breaches, financial loss and damaged credibility and is solely focused on information security. It offers a range of information security services, from consultancy to managed services. Its service portfolio consists of governance, risk & compliance, assessments and tests, education and training, incident response, defence services and Security Operations Centre (SOC). The company is the holder of one of the widest range of industry relevant certificates in the region.

The Generali Growth Equity Fund’s equity investment in Diverto will help the company continue its development activities in Cyber Security Solutions and expansion into the wider region.

Generali Growth Equity Fund is a special investment fund managed by Generali Investments, Slovenia’s oldest management company with subsidiaries in Croatia and North Macedonia. Generali Growth Equity Fund invests in ambitious small and medium-sized companies, offering support for growth financing, capacity expansion, sales network building and new product development as well as the acquisition of competitors and management of succession matters.

 

The Generali Growth Equity Fund investment in Diverto d.o.o., is co-financed by the European Investment Fund and the SID Bank. Generali Growth Equity Fund was founded in 2019 as part of the Slovene Equity Growth Investment Programme (SEGIP), which was launched upon the initiative of the SID Bank in cooperation with the European Investment Fund (EIF). It offers equity and quasi-equity financing to Slovenian SMEs and mid-cap companies. The SID Bank committed to contributing EUR 50 million of its own funds to this programme (without state guarantee), and the EIF has provided an additional EUR 50 million under the European Fund for Strategic Investments (with EFSI guarantee). By mobilising additional funding from other private investors through the SEGIP programme, overall investments for Slovenian companies could exceed EUR 150 million, which is 3-times the contribution of the SID Bank.

 

Generali launches the goals of the Net-Zero Insurance Alliance at the G20 Climate Summit in Venice

 

  • Generali is a founding member of the Net-Zero Insurance Alliance, pledging to transition the insurance portfolios to net-zero greenhouse gas emissions by 2050
  • Generali’s commitment is underpinned by its strategy for climate protection, which includes € 8.5 – € 9.5 billion of new green and sustainable investments in the period 2021-2025 and the gradual decarbonization of the direct investment portfolio, to become climate neutral by 2050

 

Eight of the world’s leading insurers and reinsurers — AXA (NZIA Chair), Generali, Allianz, Aviva, Munich Re, SCOR, Swiss Re and Zurich Insurance Group — have made an historic commitment to play their part in accelerating the transition to a global net-zero emission economy. The companies that have established the NZIA, convened by UNEP Finance Initiative’s Principles for Sustainable Insurance, have committed to reduce to zero the net emissions from their insurance and reinsurance underwriting portfolios by 2050, consistent with a global temperature rise of 1.5°C above pre-industrial levels. Each member will individually set science-based intermediate targets every five years and independently report on their progress publicly and annually to contribute to achieving the goals of the Paris Climate Agreement.

This initiative is getting ready to join the UN Race to Zero campaign in order to become officially part of the Glasgow Financial Alliance for Net Zero, which brings together the leading net-zero initiatives across the financial system.

Generali Group CEO Philippe Donnet commented: “Generali wants to actively support a just and inclusive transition to a net-zero emissions economy. The UN-Convened Net-Zero Insurance Alliance allows us to join forces with institutions and peers within our sector who share this common goal of achieving a significant and longer-lasting impact. United we are stronger. I am proud to present this initiative on behalf of the Alliance in the city of Venice in front of leaders from the most important economies in the world. Generali has historic ties with Venice and this year, our 190th anniversary, we will reopen the historic Procuratie Vecchie in St. Mark’s square as it becomes home to The Human Safety Net. We are proud to support the city, the Veneto region and its people in our shared ambition to make Venice the world capital of sustainability.”

In particular, the climate goals recently announced by Generali include the gradual decarbonization of the direct investment portfolio to become climate neutral by 2050, limiting global warming to 1.5°C above pre-industrial levels, consistent with the commitment undertaken as part of the Net-Zero Asset Owner Alliance. As an  intermediate target, Generali will decrease, over 5 years, the carbon emissions for the corporate portfolio (corporate bonds, listed equity) by 25%, in respect to their level in 2019, and will align the real estate portfolio to the 1.5° C pathway.

In addition, the Group intends to make € 8.5 – € 9.5 billion of new green and sustainable investments between 2021 and 2025 and is introducing increasingly restrictive exclusion criteria for the thermal coal sector, towards a complete disposal of investments in these activities.

Over the last three years, Generali made € 6 billion of new green and sustainable investments, which exceeded its strategic target one year in advance. Generali is convinced that the private sector can play a key role in financially supporting the ‘Just Transition’ to create a future with net-zero greenhouse gas emissions by aiding public institutions in taking the necessary actions.

Generali is celebrating 190 years of life with a series of initiatives including the completion of the restoration of the Procuratie Vecchie in Venice, overseen by David Chipperfield Architects, which will be opened to the public for the first time in 500 years. The historic landmark will become the global hub of The Human Safety Net Foundation and will be a new, vibrant space to host regular public exhibitions, events and discussions on pressing social and demographic challenges from poverty to migration. Together with the authorities of Venice, the Veneto Region and with the backing of the Italian government, Generali is committed to supporting the city’s ambition in becoming the world capital of sustainability.

 

THE GENERALI GROUP

Generali is one of the largest global insurance and asset management providers. Established in 1831, it is present in 50 countries in the world, with a total premium income of € 70.7 billion in 2020. With more than 72,000 employees serving 65.9 million customers, the Group has a leading position in Europe and a growing presence in Asia and Latin America. Commitment to sustainability is one of the enablers of Generali’s strategy, inspired by the ambition is to be the Lifetime Partner to its customers, offering innovative and personalized solutions thanks to an unmatched distribution network.