Amundi plans to increase its adjusted net income by 5% per year from 2022 to 2025, Company News

PARIS (Agefi-Dow Jones) — French asset management firm Amundi on Wednesday unveiled the goals of its strategic plan for 2025. Group subsidiary Credit Agricole, which recently topped €2,000 billion in assets, is aiming for mid-year growth. adjusted net income of 5% for the period 2022-2025, excluding external growth operations. The target is similar to that of his plan for the 2018-2022 period, which has finally reached 7% CAGR in adjusted net income.

Three-quarters of the growth expected by Amundi between 2022 and 2025 should come from the development of its core asset management activities, with the rest from the development of activities including Amundi Technology, its investment platform Alto and its B2B distribution platform Fund Channel.

Amundi also announced that it will maintain a minimum ordinary dividend distribution ratio of 65%, i.e. about €3 billion of cumulative ordinary dividends expected between 2022 and 2025, without imposing a maximum ceiling. Thus, the manager allows himself the “flexibility” to return the expected excess capital of 2 billion euros by 2025 through exclusive distribution if he does not find an opportunity for external growth that meets his acquisition criteria to finance.

Presenting the plan to the press, Amundi chief executive Valerie Bodson expressed confidence that these goals will be achieved despite the “difficult” months ahead. Despite the “efficient and profitable” model touted by the managing director, the company’s price on the Paris Stock Exchange has fallen by more than 31% since the beginning of the year.

“The price has dropped a lot due to the geopolitical and economic context. We are a bit disappointed because it does not capture the full value and sustainability of the Amundi model,” analyzed Nicholas Calcoen, Deputy CEO of Amundi.

total expansion

To reaffirm its full value and drive its medium-term growth, Amundi intends to strengthen its geographic footprint and experience, services and clientele. In terms of territories, the management company wants to “strengthen” its leadership in Europe, where it intends to “further explore its growth potential”, strengthen its position in the United States and become a leading player in Asia, a region in which it plans to reach 500 billion euros of assets under management in 2025 compared to 372 billion euros at the end of 2021. “We are far from being leaders everywhere in Europe, especially in Germany and Northern Europe,” acknowledged Valerie Bodson.

Speaking of Asia, she indicated that Amundi will use its global platform for the most “internationalized” countries in the region, such as Japan or Singapore. In China and India, joint ventures with local partners (BOC Wealth Management and Agricultural Bank of China in China, SBI in India) will remain the preferred development channels. An IPO by SBI Funds Management Private Limited, an Indian joint venture between Amundi and SBI, is also scheduled for 2022, but current conditions are not favorable for such an operation, Valerie Bodson said. The company also “always” monitors the geopolitical situation in China, but poses a risk “limited to its own capital, which is an investment activity, not a financing.” For markets such as Malaysia and Thailand, negotiations are underway to develop Amundi’s local presence.

Climate expectations

At the same time, Amundi wants to grow in all segments of its customers, especially in the third-party distributor segments. The manager has set a goal to increase assets under management in this segment to 400 billion euros by 2025, compared to 324 billion euros at the end of 2021, and also strive to become one of the five largest strategic partners in the world through a counter partnership.

On the product side, Amundi expects in particular a 50% increase in its passively managed assets by 2025 compared to €282 billion in September 2021 and wants to play a leading role in strategies for accessing individuals to real assets. with assets of 90 billion euros planned for 2025, against 63 billion euros at the end of 2021. Amundi is betting, among other things, on the European long-term investment funds Eltif.

By 2025, Amundi is also looking forward to meeting its climate commitments. The firm, which presented its 2025 ambitions in this area in December 2021, at its last general meeting in May. Among its goals, Amundi wants to engage in dialogue with 1,000 additional companies on climate issues and strengthen its responsible investment offering across all of its products and services. This will include creating a “net transition to zero” range and a goal of €20 billion in impact investment assets. Valerie Bodson said she was “very confident and serene about the integrity of ESG’s processes and the robustness of ESG Amundi’s analysis and risk management tools” when asked about failures in terms of sustainable funding for its German rival DWS.

Acquisition Criteria

Finally, Amundi wants to become “a leading technology and service provider across the entire savings value chain.” Therefore, he intends to increase the assets of Amundi Technology from 36 million euros in 2021 to 150 million euros in 2025. The manager also intends to develop its B2B fund distribution platform, the Fund Channel, through, among other things, a new commercial and industrial partnership with Caceis. . Its goal is to reach over 600 billion euros of distributed assets in 2025, up from 330 billion euros at the end of 2021.

For development, the management company, which just digested the integration of ETF provider Lyxor in early June, will also rely on its external growth policy. A major consolidator of asset management in Europe, Amundi, however, imposes certain criteria for new acquisitions. They must accelerate organic growth and be in line with the company’s strategic priorities. They must also include limited execution risk and demonstrate a return on investment of more than 10% over three years, including synergies.

-Adrien Paredes-Vanheule, L'Agefi   ed: VLV

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June 22, 2022 01:11 AM ET (05:11 GMT)