UniCredit’s Decision to Reduce Client Investments through Amundi
UniCredit, a prominent Italian banking institution, has recently made a strategic decision to reduce the level of client money it invests through Amundi to almost zero within less than two years. This noteworthy move, reported by Bloomberg, is primarily driven by UniCredit’s dissatisfaction with the fee structure associated with its ongoing asset management deal with Amundi, which is due for renewal.
This decision by UniCredit has significant implications for both parties, not least because it will result in breakup penalties for the Italian banking giant. However, UniCredit appears to view these penalties as a lesser evil compared to the existing fee structure under its current deal with Amundi.
The Background of UniCredit and Amundi Partnership
Amundi, a French asset management company, was established in 2010 following the merger of the asset management arms of Crédit Agricole and Société Générale. Crédit Agricole later acquired Société Générale’s stake in the company through an initial public offering (IPO).
The collaboration between UniCredit and Amundi dates back to December 2016 when UniCredit sold its Pioneer Investment unit to Amundi for around €3.54 billion. As part of this transaction, UniCredit and Amundi formed a strategic partnership for the distribution of asset management products, primarily supported by a 10-year distribution agreement.
UniCredit’s Declining Investment in Amundi
As of 2021, Amundi was responsible for the management of an estimated 80% of UniCredit’s investment assets. Since then, this figure has dropped to approximately 60% and is expected to further decrease to about half by the end of the first quarter. Despite these changes, UniCredit has been unable to convince Amundi to agree to revised terms.
The future of UniCredit’s agreement with Amundi has been uncertain, especially following the Italian bank’s unsuccessful attempt to acquire domestic rival Banco BPM. Interestingly, Crédit Agricole, the parent company of Amundi, also has a sales partnership with Banco BPM and increased its stake in the lender after UniCredit launched its bid last year.
UniCredit’s decision to reduce its investments through Amundi represents a significant shift in its strategic direction. While this move will undoubtedly have financial consequences for UniCredit in the short term, it appears that the bank considers this a necessary step to achieve its long-term financial objectives.
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