Integrate without collapse | All news

In the case of Amundi’s Vincent Mortier: “External growth is a powerful promoter of organic growth, provided that integration respects culture.”

Italy’s pioneer in 2017, Sabadel Asset Management in Spain in 2020, Lixor in France in 2021: The Amundi Group is the first merger between two major French banking subsidiaries after the 2015 IPO. Continued the journey that began in, Crédit Agricole and Societe Generale. His career as an integrator was interrupted by the acquisition of Smith Breeden Associates, an American fixed income management specialist in 2013, and the acquisition of Bawag PSK Invest in Austria in 2014. Answer with Vincent Mortier, Chief Investment Officer of Amundi Group.

Since its inception, the Amundi Group has experienced the strong growth characterized by a series of acquisitions, which does not slow Amundi or prevent it from considering the next acquisition. How would you explain it?

Despite its appearance, our development has been primarily through organic growth since Amundi was founded in 2010. It represents 3/4 of that and is an integral part of our DNA. Indeed, he chose to strengthen himself over time through targeted acquisitions with accurate economic and financial standards. To answer your question, you need to look at history. Amundi was born in 2010 as the first founder of the merger of Crédit Agricole Asset Management (CAAM) and Societe Generale Asset Management (SGAM). In short, it is a merger of the Asset Management Division, one of the world’s largest cooperating bank networks, with one of France’s oldest generalist banks. Two very different cultures. Initially focused on the banking network of these two banks, Amundi gradually became interested in other clients and outside France. Later, with the acquisition of Pioneer Investments in 2017 and Lyxor at the end of last year, its development accelerated. This is done as expected, thanks to the perceived experience in integration. This is a symbol of why this story lasted so long. The post-acquisition integration process opens the door to the best of both worlds. I myself am from Societe Generale before merging with CAAM CFO in the capital markets sector. There are many examples that illustrate the integrated qualities of a group.

“Each business unit has its own team with global capabilities.”

Then the organization. It is based on a clever balance between autonomy and the Central Powers of World War. Each business line has its own team with global expertise, including London’s Emerging Markets Division, Dublin’s European Equity, Boston’s American Equity, Milan’s diverse management, and even Parisian Bonds. Each has its own analyst, manager and chief investment officer, who can actively contribute globally to the Amundi brand while establishing itself as one of the best players locally. Many of these divisions were backed by entities acquired by the Group, especially US equity pioneers, all benefiting from one contribution to the acquisition. Sounds simple, but the reality is that many acquisitions in the context of integration that the financial industry has experienced since the 2008 crisis stumble, even if they do not fail to create value due to integration failure. ..

How do you manage the regular arrivals of your new team as Group CIO?

Again, what is important is autonomy, the balance between centripetal force and bottom-up approach, and consistency, and thus centrifugal force, and even the top-down approach, which is rarely used. A recent example is our position in Russia.

Each business unit has monthly meetings and benefits from its own investment committee, which shares its views and positions with the group’s investment committee. Ultimately, group consensus is created, ensuring overall consistency in market views, risks and opportunities. It is communicated to the team in the form of a particular view, but not an instruction. This is a subtle model in which each manager is responsible for his fund, its management and performance, without ignoring the group’s view. This rarely happens. The exception is if it interferes with the manager’s choice. An original organization that is neither a star manager of stock or bond picking nor a top-down organization where IOC errors cause significant losses, within an entity where significant performance differences from one fund to another coexist.

With every new integration, we seek a balance that maintains the best combination. It respects the ego of all, not just on the surface of things. This approach also applies to the partnerships we form.

“This group is working on a partnership strategy with local partners in countries such as China, South Korea and India.”

What kind of partnership is it?

Since its opening to the market economy, the Group has been working on partnership strategies with local partners such as China, South Korea and India seeking asset management skills. This mutual desire has resulted in a joint venture with the Bank of China, where we are a majority shareholder. This JV is part of a policy initiated by the Chinese state to reform the banking sector by establishing a private company dedicated to wealth management and investment specialization while relaxing the balance sheet of Chinese banks. is. Each major bank was forced to set up a subsidiary to carry out savings activities. We were the first to gain momentum. Again, the approach we have developed within the framework of mergers and acquisitions to complete these partnerships respects the balance between local and group resources. Therefore, asset management is outsourced to local experts based on local data, and access to local data is much easier and cheaper than we are. The group is taking advantage of their research. In return, they use Amundi’s IT systems and infrastructure. This model has been duplicated in South Korea and India and can now be used with new partners in emerging markets. Ultimately, all of these operations can sustain organic growth at a much higher level than our competitors.

So isn’t the group punished by the risks of consolidation and diversification that financial analysts often catch and put pressure on stock market prices?

Variance does not mean variance, but rather strengthens the group’s risk profile. In 2021, our assets under management totaled € 2.64 trillion, split into € 1.146 trillion for active management and € 310 billion for passive and ETFs. Decentralization is reflected in the breakdown of customer contributions to a bank’s net income. That is, one-quarter of individual customers, one-fourth of third-party managers, one-fourth of institutional investors, and one-quarter of joint ventures.

The risks of integration are undeniable, but we are working daily to manage them to be a weapon of investment performance, diversity and resource inclusion, and wealth to share with our stakeholders. It’s not just words.