Amundi Asset Management is approaching €1trn in assets under management, and with record inflows last year of €80bn it seems the group is on a roll.
Borne out of the merger of Crédit Agricole and Société Générale’s asset managment arms in 2010, Amundi now ranks first in Europe in terms of assets under management. Christian Pellis, global head of external distribution, admits the firm isn’t yet as well known as Crédit Agricole, but he says “that is changing”.
Amundi now has six investment centres, in the UK, France, US, Japan, Hong Kong and Singapore and 4,000 employees. Following an IPO in December last year, the largest flotation on the Paris stock exchange in a decade, Société Générale sold out of Amundi. Crédit Agricole retained its 77 per cent stake, while the Agricultural Bank of China took a 2 per cent stake and – excluding senior management holdings – the rest was offloaded, which turned out to be an effective way of raising brand awareness, Pellis says.
Pellis joined Amundi in 2013 from LGT Capital Management where he was head of distribution. He had previous stints at Fleming Fund Management in Luxembourg and Threadneedle, where he was latterly head of European distribution in London.
At Amundi, Pellis was brought on board to develop the distribution business, focusing on multi-managers, family offices, discretionary advisers and – eventually – financial advisers. Across the firm, retail sales represented 50 per cent of inflows last year, while overall networks and third-party distributors account for 24 per cent of assets under management. However, Pellis says Amundi is taking a soft approach towards third party distribution and is not trying to be all things to all men, despite its wide-ranging fund offering.
“When I talk to clients they want to hear our best stories,” Pellis says. “We are talking to them about global fixed income, emerging bonds and equities; that story is coming back into favour.”
Amundi is predominantly known as a fixed income house. Half of the assets under management are in fixed income, while 18 per cent are in money market vehicles, 13 per cent are in equities, 12 per cent are in diversified portfolios and 7 per cent are in alternative products.
London is home to the global fixed income and global equity teams, as well as the alternative investments arm, with combined assets of £22bn in the capital.
There is a growing range of Luxembourg-domiciled funds available to UK investors; currently there are 75 funds registered for UK sale, although not all are promoted. One of the key offerings is the €8bn Bond Global Aggregate fund, which launched in 2007.
Jerry Devlin, head of UK distribution, explains that the fund seeks to deconstruct all sources of alpha, for example government debt, corporate debt, currencies, emerging markets and high yield – and looks at each one in isolation.
He says: “The fund could be long in Japanese bonds but short in Japanese yen. It is a matrix of everything in the risk budget. If visibility is good we will use all of the tracking error, if it is ok we will use half the tracking error and if visibility is bad we will use less.”
Pellis adds: “It is one of our flagship funds. It is not always the best of the best but it is a secure investment. The fund had positive flows last year of €3.5bn.”
Devlin also joined Amundi in 2013, having previously been head of UK wholesale sales at Macquarie, with former positions at Castlestone Management, Baring Asset Management, Collins Stewart, Aegon UK and BGI funds.
Amundi’s other notable hires in 2013 include Laurent Guillet, who joined as chief executive for the London branch and Mark Miller who joined as head of UK institutional.
In its fund range Amundi currently has two US equity funds, but there are plans to bolster its presence in the US equity market with a launch in the second half of this year. Pellis says it is likely it will outsource the fund’s investment management to a US firm.
“We will use a partner who is good in the US equity space. You can do it yourself but first you need to prove to the client you can do it. A partnership with another company is just like a partnership with your clients,” he says.
The firm is also planning to launch a European long-short equity fund “after the summer”.
Pellis says: “We are working closely with the team here but it is likely we will get support from the outside too. We have partnerships with players with experience. The fund doesn’t need to be managed by Amundi.”
The group also boasts a wide range of passive solutions, with €60bn in assets under management in passive funds, smart beta funds and ETFs.
“The goal is to have €100bn of assets under management in the passive range in the next three years,” Pellis says. “One of the results of Mifid is that we will see more trends into passive solutions. We are seeing that in the Dutch market already. We can talk to clients about active funds and move onto passive funds as needed.”
Devlin adds: “In the words of M&G’s Jonathan Willcocks, ‘it’s not active versus passive, it’s active and passive’.”
While Amundi is gradually expanding its range further and undoubtedly growing its assets, it is not approaching the adviser market with all guns blazing.
Devlin says: “Rather than going straight to IFAs, if we can prove ourselves in the wholesale market we will then see demand from IFAs. We are taking a small team in and talking to wealth managers; we are not running a full-scale sales team.”
Pellis adds: “Our key focus is not on the IFA market yet. If we do that then we will need more UK products, which we don’t have yet. We don’t have any Oeics at the moment, but we wouldn’t rule it out. We need to see how the market develops; it might have changed in two years’ time. At the moment we are focusing on the right thing for the right market.”
However, he is aware that Amundi has ground to make up on its rivals.
“You could argue that we are late to the market, or you could argue that it doesn’t matter as we have been earlier in other markets,” Pellis says. “We want to be known as a solid provider of fund solutions. We are on the right track, but we don’t yet pop up in clients’ memories. But people know who we are, they know our products and our history.”
Ben Yearsley is investment director at Wealth Club
For such a big group with £22bn based out of London and €985bn of total assets, Amundi is a relatively unknown quantity. In my view this is partially down to the fund range being entirely offshore and the lack of early adopters from a platform perspective (this hampered many groups with offshore fund ranges). Amundi appears to have virtually every asset class covered from global fixed interest to Indian infrastructure. As a fund buyer, the choice in such a large group can be bewildering. Looking through the range, global fixed interest appears to be the flagship fund range – unsurprising as two-thirds of its assets are fixed interest. Other areas of interest include emerging markets, which have performed credibly in a tough time for the sector.
Darius McDermott is managing director at Chelsea Financial Services
In terms of assets, Amundi is massive – number one in Europe and in the top 10 globally – and has more than 70 Luxembourg-based offshore funds to choose from, but it’s fair to say that it has a lack of brand presence in the UK. With French origins, it’s perhaps no surprise its strongest franchise is fixed interest (running around €630bn) and its global bonds, which are actually run out of London, compete well with the likes of Franklin Templeton and PIMCO. Its funds are not widely available on mainstream platforms, however, so are really only on the radar of DFMs, fund of funds managers and the banks. The small discretionary sales team it has on the ground here concentrate on just three or four key products, including its flagship Global Aggregate fund. Unless it chooses to launch some UK-domiciled funds, or get enough momentum behind its core fixed income products so that it can get onto the likes of the Cofunds and other mainstream platforms, growing its client base here will be very difficult.
Martin Bamford is managing director at Informed Choice
Amundi is not a household name among UK investors or advisers, despite being one of the top 10 largest asset managers in the world and the largest in Europe. It has built assets through third-party distributors and with institutional rather than retail clients. The group offers a very wide range of investment solutions including equities, fixed income and absolute return funds. It also covers ETF and index funds, and socially responsible investing, making the product range one of the broadest available. The majority of its funds available in the UK have offshore status, making them less attractive to UK resident investors. Without investment in brand recognition or distribution here in the UK, it is unlikely to become a leading asset management player in this country.