Last updated: 12:52 / Wednesday, 5 January 2022
A strategic vision

Leadership in European ETFs and a Business of Liquid Alternatives: Amundi's Bets After the Acquisition of Lyxor

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  • The purchase elevates Amundi to the top position among European ETF providers and enriches their active management offering
  • Amundi has made the strategic decision to create a dedicated Liquid Alternatives business line called Amundi Alternatives
  • The asset manager reaffirms its position as a leader in alternative investment, aiming to increase assets under management on the UCITS Alternative platform by 50% by 2025
  • As of January 1, 2022, Lyxor is a subsidiary of Amundi and will be integrated into the group's operations with significant changes to its structure

After six months of preparatory work and the completion of the acquisition of Lyxor, Amundi explained this week the strategic benefits for its business and growth plans. Three key ideas were the focus of the press conference: to be the leader in the European ETF market, to have a platform of liquid alternative investment solutions and to add new skills and talent to its team.

"The acquisition of Lyxor is another important step in the deployment of Amundi's strategy. It elevates Amundi to the top position among European ETF providers and enriches our active management offering with a leading position in liquid alternative assets. Amundi is fully prepared to be the partner of choice in these areas of expertise for both retail and institutional clients in Europe and Asia, and to continue its growth in two promising markets," said Valérie Baudson, CEO of Amundi, during her presentation. 

The head of the asset manager explained that the integration of both companies will generate synergies in terms of annual costs of 60 million euros before tax (68 million dollars), the full impact of which is expected to be visible in 2024. By the same date, Amundi's CEO estimates synergies in terms of annual current income to be €30 million (34 million dollars). "The integration process will be carried out progressively over the next two years with several stages: IT migration, legal mergers, creation of a new organization," she clarified.  

Founded in 1998, Lyxor has more than €140 billion in assets under management and advice. In addition, the asset manager is a major player in the ETF market with €95 billion under management, making it the third largest player in Europe with a market share of 7.7%.

Regarding the active management business, "Lxyor has developed a recognized expertise in active management, with €45 billion under management, in particular through its leading alternative platform. Thanks to this acquisition, Amundi benefits from strong levers to accelerate its development in the ETF segment, which is currently experiencing rapid growth, as well as complementing its active management offering, particularly in liquid alternative assets, as well as advisory and OCIO capabilities, and fiduciary management," Baudson emphasized.

Commenting on the roadmap, Lionel Paquin, CEO of Lyxor, added: "Lyxor joins Amundi with remarkable business momentum across all franchises and fully committed to ambitious new development goals. Driven by a pioneering spirit they have always shared, the Amundi and Lyxor teams will now work as one to build for their clients an even stronger and more innovative leader."

ETFs, smart beta and indexed solutions

As highlighted by Fannie Wurtz, global head of ETFs, Indexing and Smart Beta business, "the acquisition of Lyxor will propel Amundi's passive platform to the position of Europe's leading ETF provider." Overall, the combined ETF business represents more than €170 billion in assets under management, representing a 14% share of the UCITS ETF market for Amundi. 

She also argues that the new expanded ETF range will provide investors with "efficient access to one of the largest and most comprehensive ranges of UCITS ETFs available on the market". This range of more than 300 products includes some of the most attractive strategies, especially in ESG, weather, thematic investing, emerging markets and fixed income.

"In a market where size and scale are key, Amundi's passive platform, bolstered by more than €282 billion, is an important step in cementing Amundi's unique positioning as the European partner of choice in passive management for retail and institutional clients around the world. The Amundi Passive platform has set itself the target of increasing its assets under management by 50% by 2025," she added.

Wurtz explained that their new position will allow them to continue to grow in an industry segment that has been driven in recent years by clearer, more concise and transparent regulation, as well as the transformation towards ESG and the digitization of distribution channels. Supported by this growth experienced by the ETF universe, Amundi expects strong growth in adoption by retail investors, both through ETF portfolio models and the acceleration of the European self-directed ETF segment, especially through online platforms. "In this broad retail segment, Amundi will leverage its global firepower and deep understanding of local market specificities to partner with distributors to co-design comprehensive and fully tailored solutions, including services such as digital and training support," the asset manager says.

In this regard, Amundi anticipates growing interest from European institutional investors who are keen to increase their use of ETFs, especially for fixed income and ESG allocation. As Wurtz clarified, the fund manager has identified a strong appetite from non-European institutions, as the UCITS ETF franchise has proven attractive. "Thanks to the group's long footprint in Asia and its presence in Latin America, and the breadth and depth of its offering, Amundi is well positioned to establish itself as the preferred European passive provider in these regions," she commented on what its main regions of interest will be.

Finally, the firm wants to take advantage of the high demand for ESG solutions to grow the ETF business. Its conviction is that ESG ETFs will contribute to democratizing access to meaningful investment in a cost-effective way. In this regard, Wurtz announced that Amundi's existing product range is being strengthened with the addition of innovative products from Lyxor ETFs. "In particular, with the Green Bond and Net Zero Climate ETFs, the newly expanded range of Amundi ESG & Climate UCITS ETFs, with a market share of around 20%. Going forward, responsible investing will be the primary focus of any product launches within the platform," she said.

In addition, in line with Amundi's 2025 ESG Ambition plan and Net Zero commitment, Amundi ETF will aim to double the proportion of responsible ETFs - i.e. classified as SFDR 8 or SFDR 9 - available to investors, reaching 40% of the total ETF range by 2025. As announced by the fund manager, all these growth targets and projects will be led by Arnaud Llinas, who will head the Amundi ETFs business division.

New business line: liquid alternative solutions

The second key to the deal, Baudson and Wutz insisted, is to enable Amundi to create a new business area focused on liquid alternative solutions, where Lyxor has extensive expertise and a strong business. "The integration of Lyxor allows Amundi to enrich its active management capabilities with the addition of alternative investment expertise, giving investors access to innovative sources of diversification and performance for their portfolios," the asset manager noted.  

Amundi has therefore made the strategic decision to create a dedicated Liquid Alternatives business line called Amundi Alternatives, thus complementing its range of investment solutions to better serve the needs of all its clients worldwide, including institutions, private and wealth investors and asset managers. 

The Liquid Alternatives business is currently valued at more than €23 billion, including the Liquid Alternatives UCITS Platform and the Dedicated Managed Account Platform (DMAP) business, which represents €16.7 billion of assets. As announced, this division will be headed by Nathanaël Benzaken.

With this decision, the asset manager reaffirms its position as a leader in alternative investment, aiming to increase assets under management on the UCITS Alternative platform by 50% by 2025 and accelerate the development of DMAP towards institutional clients internationally. "This new platform is well placed to generate resilient, long-term growth thanks to Lyxor's historical position as a trusted partner to the best names in the global alternative investment industry, as well as to the world's largest and most sophisticated investors," the fund manager concludes.

Internal organization

During the presentation of this ambitious plan, Amundi's CEO emphasized that the Lyxor team will be integrated with the current Amundi team. Thus, as of January 1, 2022, Lyxor is a subsidiary of Amundi and will be integrated into the group's operations with significant changes to its structure. 

In particular, Lionel Paquin, CEO of Lyxor, joins Amundi's Executive Committee; and Arnaud Llinas, head of ETF and index solutions at Lyxor, assumes responsibility for the ETFs, indexing and Smart Beta business line for the consolidated perimeter within Amundi. In addition, Nathanaël Benzaken, Chief Client Officer at Lyxor, also assumes responsibility for the new Alternatives business line at Amundi. According to the fund manager, in their new roles, Arnaud Llinas and Nathanaël Benzaken will report to Fannie Wurtz, a member of Amundi's General Management Committee.

In addition, Florence Barjou, currently Chief Investment Officer of Lyxor, will become Chief Investment Officer of Crédit Agricole Insurance, effective March 1, 2022. And Edouard Auché, Lyxor's Secretary-General, will be in charge of the migration of Lyxor's IT and operations to Amundi's platform, in addition to his current duties. Finally, Coralie Poncet, Head of Human Resources at Lyxor, is in charge of leading the integration of Lyxor employees into Amundi, in addition to her current duties.

The fund manager notes that all other Lyxor businesses and country managers report to the corresponding business and country managers within Amundi. In a second phase following the legal transactions, scheduled for mid-2022, Lyxor will merge with Amundi.

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