Valérie Baudson’s debut year running Europe’s largest asset manager went well. Amundi of France said assets under management surpassed €2tn as net profits rose 37 per cent in its full-year results on Wednesday. Surging stock markets and bank accounts full of cash helped Amundi hit profit targets early. Shares rose almost 5 per cent on the day.
Its diversified model should help Amundi weather feared market turbulence in 2022. ETF manager Lyxor, acquired from Société Générale for €825mn last April, has added €148bn of assets. These put Amundi behind only BlackRock in European ETFs. Big is best in asset management.
Any future fee erosion in the traditional active fund management business should be offset by two areas. To begin with, Amundi’s exposure to fast-growing emerging markets should soon feature more in Amundi’s valuation. Joint ventures in politically risky China and in India help offset its stolid business at home. Amundi shares are trading at 11 times next year’s earnings, a nearly 40 per cent discount to floundering peer Abrdn.
The group’s Indian joint venture with State Bank of India, of which Amundi owns 37 per cent, should have its initial public offering this summer. Given its soaring funds under management, this stake could be worth $3.5bn. That relies on a growth 40 times forward earnings multiple for similar local firms. Amundi plans to sell 4 per cent, significant against its expected operating earnings of about $1.9bn this year
Another supporting strand is Amundi’s strength in environmental, social and governance investing. Active strategies accounted for €56bn from the total of €76bn of net inflows last year. Net flows into ESG strategies accounted for 40 per of that active total. ESG assets under management more than doubled to €847bn, helped by booming tech stocks which are the largest in the category.
Amundi ranks best in class for its ESG offering, scoring higher above rivals in the all-important climate category, thinks Citi. Its shares still offer good value among its peers, considering its scale and earnings potential.
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