SocGen Considering Options for $167 Billion Asset Manager Lyxor
SocGen Considering Options for $167 Billion Asset Manager Lyxor
(Bloomberg) --
Societe Generale SA is considering options for its Lyxor asset-management business overseeing about 151 billion euros ($167 billion) as the company accelerates asset disposals, according to people familiar with the matter.
The French bank is weighing alternatives for the unit, including a sale or merger, amid heavy competition in the asset-management industry, the people said, asking not to be identified because the deliberations are private. A process may kick off in the fourth quarter, the people said. No final decisions have been made and France’s third-largest bank may still decide to retain the business, they said.
A representative for SocGen declined to comment.
Chief Executive Officer Frederic Oudea has been cutting costs and selling assets as the bank seeks to shore up its finances after a surprise profit warning in January. The company is also weighing exits from its U.K. private banking business and Nordic equipment-leasing operations, people familiar with the matter have said. Last year it agreed to sell its Belgian private banking unit to ABN Amro Group NV.
SocGen’s American depositary receipts rose 2.2% to $5.07 at 3:36 p.m. Thursday in New York, giving the company a market value of $21.6 billion.
Consolidation in the asset management industry is on the rise as competition from large competitors, such as BlackRock Inc. and Vanguard Group, cuts margins and puts pressure on firms to get bigger or get out. Deutsche Bank AG and UBS Group AG have held talks to combine their asset management businesses in a deal that would’ve created a European giant, though negotiations broke down after the companies couldn’t agree on how to share control, people familiar with the matter said earlier this year.
Lyxor managed about 151 billion euros of assets at the end of July, with almost half in exchange traded funds. Lyxor is one of the largest providers of exchanged-traded funds in Europe.
Cost Cutting
The company has also hired Bain & Co. to help it reduce expenses at its Paris headquarters by about a fifth, focusing on services such as information technology, human resources and the finance department, a person familiar with the matter said earlier Thursday.
The review may lead to hundreds of additional job cuts in Paris, a person familiar with the matter said. Jean-Francois Mazaud, the former private banking boss who is overseeing SocGen’s investment-banking overhaul, added the review of the potential cuts at headquarters in June, the person said.
Read more about the cost cutting initiative here.
Any new job and cost reductions would be on top of ongoing efforts. SocGen announced 1,600 job cuts earlier this year as it seeks 500 million euros in savings to try to salvage profitability. The firm’s also working with McKinsey & Co. to find ways to bolster its key capital level as it confronts higher regulatory demands in a review known internally as “Optica,” Bloomberg reported in June.
--With assistance from Fabio Benedetti-Valentini, Myriam Balezou, Suzy Waite, Sree Vidya Bhaktavatsalam and Matthew Monks.
To contact the reporters on this story: Jan-Henrik Förster in London at jforster20@bloomberg.net;Geraldine Amiel in Paris at gamiel@bloomberg.net;Nishant Kumar in London at nkumar173@bloomberg.net
To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Amy Thomson, Michael Hytha
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