It Looks Like Deal Time for Europe’s Top Money Managers
For some time, analysts have been predicting the great unbundling of Europe’s asset management industry. Banks and perhaps even a few insurers, facing the need to raise capital to meet regulatory requirements, would scramble to unload their fund management businesses. The logic seemed compelling, but the wave of M&A activity failed to materialize.
Lately, however, there are signs of movement. Aberdeen Asset Management announced last month that it was discussing a possible acquisition of Scottish Widows Investment Partnership, the £146 billion ($234 billion) fund management subsidiary of Lloyds Bank. Analysts estimate the business could fetch £500 million. The news follows the recent agreement by Banco Santander to sell a 50 percent stake in its asset management subsidiary to the U.S. private equity firms Warburg Pincus and General Atlantic. And in July, Rabobank Group of the Netherlands sold a 90 percent stake in its fund management arm, Robeco Group, to Orix Group, a Japanese financial services outfit, for €1.9 billion.
Expect more such deals, says Andy Maguire, managing partner for the U.K. at Boston Consulting Group. Not only do banks need capital, but asset managers themselves need to bulk up. The low-interest-rate environment across the developed world is forcing investors to explore ever-more-exotic solutions in their search for yield, creating a sort of arms race among asset managers.
“It’s not obvious that the things that are selling are the things that you can do without size or scale,” says Maguire. “You need plumbing and infrastructure that’s beyond the ken of your traditional active asset manager.”
Scale is evident in the Euro 100, Institutional Investor ’s annual ranking of the region’s largest fund managers by assets. Allianz, the big German insurer, tops the list with €1.86 trillion in assets at the end of June, up 6.6 percent from a year earlier. It is followed by rival French insurer AXA, Switzerland’s UBS, French fund manager Amundi and the New York–based fund giant BlackRock.
How We Did It
To compile this ranking, Institutional Investor surveyed banks, insurance companies, independent fund managers, foreign money management firms with registered offices in Europe, hedge funds and pension funds. Companies headquartered in Europe were asked to report global assets under management. Non-European companies were asked to report only European-derived assets (invested domestically or internationally) and non-European assets slated for investment in Europe. Senior Editor Jane B. Kenney, assisted by research Valentina McKenzie, gathered the data from questionnaires completed by the institutions themselves. We supplemented this information with additional reporting, annual reports and follow-up e-mails and telephone calls.
The numbers are as comparable as possible considering different accounting practices. Assets are stated in euros. In some cases, assets at continental European institutions are higher than reported because their accounting rules require that they value assets at the lower of cost or market value. As a result of currency conversion and rounding, not all columns add up. Unless otherwise specified, 2013 assets are as of June 30, 2013, and 2012 assets are as of June 30, 2012. Totals for 2012 may differ from those previously published, and totals for 2013 may differ from portfolio or subsidiary sums because of rounding.