Amundi Hit by $19 Billion Outflow From China Joint Venture

(Bloomberg) -- Amundi SA’s net inflows were unexpectedly dragged down by 16.3 billion euros ($19 billion) of cash being pulled from a Chinese joint venture in the third quarter.  

Europe’s largest asset manager raked in just 200 million euros in the three months to Sept. 30, compared with the 10.5 billion euros consensus predicted by analysts surveyed by Bloomberg. Still, the Paris-based firm’s quarterly profit beat estimates and assets under management were in line with forecasts, according to a statement Thursday.

The outflows from the firm’s joint venture with Agricultural Bank of China were largely driven by the bank withdrawing 11.6 billion euros to reinvest in the nation’s economy, part of a broader move being seen among Chinese lenders, Nicolas Calcoen, Amundi’s head of finance and strategy, said in an interview. He said it was a one-time adjustment.

Asia is central to Amundi’s global expansion plans under the leadership of new Chief Executive Officer Valerie Baudson, as the firm confronts an increasingly competitive landscape. Asset managers across Europe are grappling with a more complex regulatory backdrop, while the growing might of behemoths like BlackRock Inc. and Vanguard Group Inc. keeps adding to fee compression and squeezing industry margins.

Amundi managed to pull in around 15 billion euros across its active and passive strategies through the third quarter. That was largely driven by the firm’s actively managed funds, while flows into the real and structured assets business remained flat for the quarter.

Amundi shares were down 1.7% at 10:30 a.m. in Paris on Thursday. 

Profit Hike

The asset manager reported adjusted net income of 333 million euros for the three months, compared with the 282 million euros consensus predicted by analysts. Assets under management rose 1% from the previous quarter to 1.81 trillion euros, and were up 9% from a year earlier.

“Earnings in the third quarter of 2021 were up sharply compared with the third quarter of 2020, driven by fast-growing revenues and controlled costs,” Baudson said in the statement.

To tackle the more competitive landscape, Amundi earlier this year agreed to buy Societe Generale SA’s fund management arm Lyxor in an 825 million-euro acquisition that will vault the firm to Europe’s second-largest ETF manager. The deal is expected to close by February 2022.

Amundi has said it’s targeting 500 billion euros in assets under management in Asia by 2025. It had 324 billion euros as at Sept. 30, according to Thursday’s statement. 

The firm also raised more than $2 billion in August via its joint venture with State Bank of India, completing the largest active mutual fund launch ever in the country. 

©2021 Bloomberg L.P.