UniCredit, an Italian bank, is reducing the proportion of Amundi funds in its total assets under management (AUM) as its long-standing agreement with the French group enters its final years, according to a source familiar with the matter. The deal, struck in 2017 when UniCredit sold its in-house asset management operations to Amundi, mandates that Amundi’s funds account for 80% of the total AUMs at the bank. However, UniCredit has started decreasing Amundi’s role, incurring penalties outlined in the contract. The charges are not significant, allowing the bank to avoid public disclosure. UniCredit’s CEO, Andrea Orcel, is focused on rebuilding the bank’s fund management business to enhance fee revenue and has not ruled out the possibility of not renewing the contract with Amundi.
Relations between UniCredit and Amundi have strained since Orcel took over as CEO and attempted to modify the terms of the distribution agreement previously established by his predecessor. Further tension arose when Credit Agricole, which owns a majority stake in Amundi, acquired a stake in Banco BPM, a bank that UniCredit had contemplated acquiring. To enhance its in-house asset management capabilities, UniCredit established a team to collaborate with partners like BlackRock, Fidelity, JPMorgan, and Amundi, aiming to offer customers more tailored funds. In addition, UniCredit entered into a deal with fund manager Azimut, granting the bank the option to take control of an asset management company being established by Azimut in Ireland, catering to UniCredit’s 7 million Italian customers.
While Amundi has discussed the possibility of carving out its operations with UniCredit to sell them back to the bank, sources indicate that UniCredit finds this option unappealing. Analysts at Kepler Cheuvreux estimated that if the contract were to end in 2027, it would take until at least 2030 for UniCredit to retrieve the over 100 billion euros of AUMs currently invested in Amundi products. UniCredit’s decision to scale back Amundi’s funds within its AUMs accelerates the process of releasing clients’ money, potentially allowing it to be invested elsewhere. Kepler Cheuvreux predicts a slowdown in Amundi’s inflows from Italy starting in 2024, which was a consistent source of inflows for the group in recent years. Amundi’s Italian AUMs amount to 213 billion euros, representing 11% of the group’s total. In 2017, Amundi acquired UniCredit’s asset manager arm Pioneer for 3.55 billion euros, following a 315 million euro extraordinary dividend that UniCredit received from the unit before the sale.
(Source: Reuters)
