Strategy

UniCredit Sells Asset Manager Pioneer for $4B

The sale to France's Amundi gives Italy's largest bank a capital infusion as it seeks to meet tougher regulatory requirements.
Matthew HellerDecember 13, 2016
UniCredit Sells Asset Manager Pioneer for $4B

UniCredit SpA has agreed to sell its asset-management unit Pioneer Investments to France’s Amundi SA for 3.88 billion euros ($4.1 billion), giving Italy’s largest bank an infusion of capital as it continues its restructuring efforts.

The deal will create the world’s eighth-largest asset manager with nearly 1.28 trillion euros ($1.35 trillion) of assets under management and Italy will become Amundi’s second-largest market. The French firm is controlled by Credit Agricole.

“The acquisition of Pioneer Investments is a major step to anchor Amundi as the European leader in asset management,” Amundi CEO Yves Perrier said in a news release.

UniCredit’s chief executive, Jean Pierre Mustier, said the sale of Pioneer was “another tangible example” of the bank’s strategy of selling assets to meet tougher capital requirements. In stress tests in July, it had the worst performance among systemically important banks.

“We are particularly pleased with the outcome as Pioneer, its teams, [and] its retail and institutional clients will now become part of a recognized world-leading asset management firm,” Mustier said.

UniCredit also recently sold a 30% stake in FinecoBank SpA and a 10% stake in Bank Pekao SA, helping to raise its common equity Tier 1 ratio with fully applied Basel 3 rules — a commonly used measure of a bank’s financial health — to 10.82%, from 10.33% at the end of the second quarter.

The bank said the sale of Pioneer is expected to boost the ratio by another 78 basis points.

“The deal is a positive for all the parties involved. UniCredit raises some money and Amundi boosts its market presence,” Clairinvest fund manager Ion-Marc Valahu, who holds shares in European banks, told Reuters.

Amundi is already Europe’s largest money manager measured by assets under management. “Globally, money managers are under pressure to consolidate, driven in part by the need to cut back-office and other expenses as fee income is pressured by the growing popularity of low-cost passive funds, which aim to match returns from an index,” The Wall Street Journal noted.