When in April this year, the Economist covered a story about ‘Europe’s BlackRock’, things were already looking up for Amundi. At the time, markets were reacting to the promotion of Valérie Baudson to the position of chief executive. The markets reacted well then, and the markets are reacting well today as well.
At the time, Amundi was a little behind BlackRock, when it comes to assets under management (AuM). As of the end of 2020, BlackRock had $8.7 trillion to Amundi’s $2 trillion. And the question was already being raised, does Amundi have much more scope to grow?
One of the areas that Amundi have been focusing on is the Amundi Tech division, managed by Guillaume Lesage, Amundi’s chief operating officer in Paris. A product some have touted will take on BlackRock’s famous Aladdin system. The team at Amundi believe it offers more services than Aladdin, showing the firm’s commitment to technology.
Amundi announces H1 & Q2 2021 results
Today’s news by Amundi shows a strong result so far in 2021. Some of the takeaways of the financial statements for the second quarter of 2021 were summarized by their CEO, Valérie Baudson, who spoke about their Medium-Long-Term (MLT) Assets amongst other things:
“Amundi posted very good financial and operating performance in the second quarter of 2021, driven by a growth momentum in all business lines, especially with buoyant inflows in MLT assets. The strong growth in net income was amplified by a very favourable market environment.
“The recent strategic initiatives (the partnership with Banco Sabadell; the joint venture with Bank of China, and Amundi Technology) are starting to bear fruits. The acquisition of Lyxor, whose integration is being actively prepared, will be a new growth driver.
“Such strong performances prove that Amundi’s development strategy is relevant. Our group has all the strengths needed to pursue its profitable growth trajectory.”
There were many more positive outcomes shared by Amundi, for instance:
‘Amundi’s assets under management totalled €1,794bn at 30 June 2021, an increase of +12.7% year-on-year and +2.2% vs. the end of March 2021.’
Amundi’s strategic initiatives launched in 2020 are bearing fruit
Many observers will have been keen to hear how Amundi have managed to implement their strategy. 2020 saw the launch of several strategic initiatives that were planned to bolster the group’s growth in the coming years and are already showing results in the first quarter of 2021:
- Sabadell AM: successful integration and partnership with Banco Sabadell:
Twelve months after the acquisition of Sabadell AM on 30 June 2020, its integration is complete both technologically and operationally (management teams, sales teams, and control functions). The beginning of the partnership with Banco Sabadell is very promising, resulting in gains in market share15; record business activity was achieved over the first 12 months with more than €1.5bn in net inflows (Amundi and Sabadell AM funds) in the Banco Sabadell network. More than 50% of the announced synergies16 should be achieved in 2021.
- Successful start-up of the new Wealth Management subsidiary with Bank of China (fourth-largest Chinese bank)
After the operational start-up of this new subsidiary (of which Amundi holds 55%) in the fourth quarter of 2020, sales momentum is strong with the launch of ~50 funds since its creation and increasing interest from the BoC network for the subsidiary’s products (specifically maturity funds and green funds). Total net inflows for the first half of the year already stand at +€3.4bn.
- Ramping up of Amundi Technology
Amundi Technology, the new business line dedicated to technology services, expanded its development, generating €19m in revenue in the first half of 2021, including €12m in Q2 2021. Deployment of services continued with seven new customers (i.e. 29 customers overall at the end of June 2021).
Responsible Investing at Amundi
Amundi continued to implement its ESG action plan, thus confirming its leadership:
- ESG assets under management stood at €798bn at 30 June 2021. The change from 31 December 2021 (AuM of €378bn) resulted from:
- continued integration of ESG criteria into traditional management processes;
- high inflows in H1 (+ €18.7bn in MLT), the majority in active management, with good momentum for Climate & Environmental solutions, ESG fixed-income funds, the range of thematic Equity funds;
- Some 700 open-ended funds, dedicated funds and mandates, representing over € 680bn in AuM (compared to € 450bn at end-March 2021) are classified in Articles 8 and 9 under the new European Sustainable Financial Disclosure Regulation (SFDR), making Amundi a leader in this area.
As Amundi is a European leader in financial services, the above news may draw a small smile from commentators in Europe. Some of the key areas of growth mirror what many of the largest financial institutions in the world are currently focusing on. Can Amundi do it better though?
Author: Andy Samu
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