MPS Alternative Investments, Monte dei Paschi di Siena's hedge fund arm, has teamed up with EIM and Financial Risk Management (FRM), two established third-party hedge fund advisers, for its debut into Italy's nascent hedge fund market.

This month, the Milan-based asset management arm of the world's oldest bank plans to launch three funds of hedge funds. These types of hedge fund vehicles are the only ones so far to get the thumbs up from Banca d'Italia.