Valerie Baudson

Amundi, Europe’s largest investment manager, with a global and Australian client base, has signed a binding agreement for the acquisition of Alpha Associates, an independent asset manager offering private markets multi-manager investment solutions.

This acquisition will position Amundi as a leading European player in this space with a team of over 70 experts, a combined ~€20bn of assets under management, an enhanced multi-manager offering spanning across private debt, infrastructure, private equity and venture capital, and an enlarged client and geographical footprint. It will also reinforce the presence on secondary transactions, which is a relevant capability in the current market.

The transaction increases Amundi’s offering of private markets funds and tailor-made solutions for its existing institutional clients globally. Finally, it accelerates the development of suitable private markets products for individual clients.

A combination of two complementary platforms

Founded in 2004, Alpha Associates is a Zurich-based, founder-led, specialist in private markets multi-manager solutions, which currently manages €8.5bn of assets. Alpha Associates brings differentiating funds-of-funds capabilities in private debt, infrastructure, and private equity, to over 100 institutional investors, notably pension funds and insurance companies, with a strong footprint in Switzerland, Germany, and Austria.

These capabilities will be combined with the existing private markets multi-manager set-up of Amundi: a dedicated Paris-based team with over 20 years of experience, currently managing €12bn of assets on behalf of institutional clients, mainly in France, Italy and Spain. As part of the transaction, Amundi’s and Alpha Associates’ multi-manager activities in private markets will be combined into a new business line.

An expanded offering in a high growth segment benefiting from long-term trends

Private markets have been one of the most dynamic areas of asset management in the past years as investors are looking to diversify their portfolio with an alternative asset class that has proven to provide attractive returns with moderate volatility over the cycle.

Multi-manager offerings are well suited to accompany investors on this path, as they provide access to a broader range of management skills, hence enhanced diversification and improved risk profile. Thereby, multi-manager investment solutions should also allow to offer real assets products to an underinvested retail client segment.

A transaction creating substantial value

This transaction, compliant with Amundi’s financial discipline, and in line with its strategic plan, will be significantly value accretive thanks to revenue synergies and strong growth potential. The return on investment will be above 13% in year three including revenue synergies.

The transaction is expected to be completed by the third quarter of 2024, subject to regulatory approvals.

Valerie Baudson, Chief Executive Officer of Amundi, commented: “Within the asset management industry, private markets have seen sustained growth in recent years, as investors have increased their allocation to this asset class in their portfolios. This segment should also benefit from the appetite of retail investors for real assets investment solutions. The acquisition of Alpha Associates will thus allow Amundi to significantly broaden its client base, capabilities, and product offering, in a promising market. This move, which is fully in line with our strategic objective to increase our footprint in Alternative and Real Assets in Europe, will allow us to create substantial value for our clients and shareholders.”

Dominique Carrel-Billiard, Head of Alternative and Real Assets at Amundi, added: “We are looking forward to welcoming and working with the talented teams of Alpha Associates. The multi-manager model is one that offers strong resilience thanks to diversification in terms of asset classes and management companies. In addition to the significant growth potential for the institutional clientele, it is also adapted to address the retail market. The enlarged Amundi Alternative & Real Assets business will be ideally positioned to serve the needs of a growing set of clients and benefit from strong tailwinds in the industry.”

Peter Derendinger, founding partner and CEO of Alpha Associates, who will head the combined business declared: “We are pleased to join Amundi, a major global player in the asset management industry, and play an important role in Amundi’s plan to accelerate its footprint in the private markets segment. We are excited to work with Amundi’s private markets team, which shares Alpha’s ambition to generate outstanding risk-adjusted performance for clients.”

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Yves Perrier

Amundi announces that it has entered into exclusive negotiations with Société Générale for the acquisition of Lyxor^[1] for a total cash consideration of €825m, or €755m excluding excess capital^[2].

Founded in 1998, Lyxor is a pioneer in ETF in Europe and has €124bn^[3] in Assets under Management (AuM). Lyxor is one of the key players in the ETF market (€77bn of AuM^[4], 3rd largest player in Europe with a 7.4% market share^[5]) and has developed a recognized expertise in active management (€47bn of AuM), notably through its leading alternative platform^[6].

Thanks to this acquisition, Amundi would become the European leader in ETF, with €142bn combined AuM, a 14% market share in Europe^[7] and a diversified profile in terms of client base and geography.

Amundi would benefit from strong levers to accelerate its development on the fast-growing ETF segment, while complementing its offering in active management, in particular in liquid alternative assets as well as advisory solutions.

Given the high synergy potential, this transaction compliant with Amundi’s financial discipline would be significantly value accretive, with:

• an enterprise value representing a P/E 2021e multiple of ~10x^[8], including run-rate cost synergies only
• ~+7% accretive on Amundi’s EPS 2021e, including run-rate cost synergies only^[9]
• return on Investment > 10% in year 3 after completion including run-rate cost synergies only

This acquisition is fully in line with the Crédit Agricole group’s strategy which aims at reinforcing its position in the asset gathering businesses.

The transaction is expected to be completed by February 2022 at the latest, after consultation of the Works Councils, and subject to receiving the required regulatory and anti-trust approvals.

About this announced entry into exclusive negotiations, Yves Perrier, Chief Executive Officer of Amundi, commented: “The acquisition of Lyxor will accelerate the development of Amundi, as it will reinforce our expertise, namely in ETF and alternative asset management, and allows us to welcome highly recognized teams of people. This acquisition is fully in line with the Crédit Agricole group’s reinforcement strategy in the asset gathering business. It will also further reinforce the business relationships with our historical partner Société Générale. Finally, by creating in France the European leader in passive asset management, it will contribute to the post-Brexit positioning of the Paris financial centre”.

Valérie Baudson, Deputy Chief Executive Officer of Amundi, added: “We are glad and are looking forward to welcoming the talented teams of Lyxor. The combinations of our strengths will allow us to accelerate our development in the ETF, alternative asset management and the investments solutions segments”.

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[1] Certain activities from Lyxor are excluded from the scope of the transaction and retained by Société Générale: (i) structured asset management solutions intended for Société Générale’s global markets clients and (ii) asset management activities dedicated to savings solutions and carried out for Société Générale (Branch networks and Private Banking) such as structuring of saving solutions, funds selection and the supervision of the Société Générale Group’s asset management companies
[2] Excess capital of €70m compared to asset management capital requirements applicable to Lyxor
[3] As of end December 2020, for the considered transaction perimeter
[4] As of end December 2020
[5] Source : Amundi, Lyxor, ETFGI, as of December 2020
[6] Liquid alternative assets investment platforms (notably UCITS funds) for private banks and asset managers
[7] 6.2% for Amundi standalone
[8] Based on a €755 price, excluding excess capital
[9] Based on consensus 2021e EPS, accounting for run-rate cost synergies

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