Europe's largest asset manager Amundi has released its results for the first quarter of the year, revealing that net income has risen by 50 percent on a year-on-year basis.
Following the pandemic, net income has vastly increased on last year when the economy was shut down across developed markets, and is also 7 percent above Q4 2020.
Alongside the improving economic conditions, revenues also benefitted from enhanced business dynamics. Net asset management fees were up significantly compared to both Q1 2020 (+5.1 percent) and Q4 2020 (+5.6 percent). Overall, net asset management revenues up by +15.1 percent vs. Q1 2020, driven by management fees (+5.1 percent vs. Q1 2020) and a high level of performance fees (EUR 111 million compared to EUR 42 million in Q1 2020)
This was partly due to the increase in the equity market average (+11 percent Q1/Q1 and +1 percent Q1/Q4 for the EuroStoxx Index) and partly down to vigorous inflows in retail and MLT assets for several quarters.
Meanwhile, performance fees reached a record high (EUR 111 million vs EUR 42 million in Q1 2020 and EUR 94m in Q4 2021), reflecting the bullish markets and strong investment performances. These improved market conditions drove the positive change in net financial income compared to Q1 2020, during which the abrupt market downturn affected the voluntary investment portfolio and seed money.
According to the results, assets under management at the firm has reached $1.76 trillion, up 14.9% year-on-year (+1.5 percent for the quarter). This is a consequence of robust inflows in MLT assets, and a marked increase EUR 7.8 billion increase in retail (now reaching EUR 9.8 billion).
There were also challenges reported in the results, with total net inflows of EUR - 12.7 billion. Amundi believes the decline of outflows in treasury products (- EUR 18.6 billion) is linked to the interest rate environment. While there has been positive momentum in JVs (+ EUR 3 billion) there has been significant outflows in Channel Business in China (- EUR 7.0 billion) as expected
Commenting on the figures, Yves Perrier, CEO, said: “Amundi recorded very good performances in the first quarter of 2021: results improved substantially, inflows in MLT assets were strong and operational efficiency continued to improve. The strategic initiatives launched in 2020 (the partnership with Banco Sabadell, the joint venture with Bank of China, and Amundi Technology) are starting to bear fruits.
The results follow reports on April 7 that Amundi entered into exclusive negotiations with Societe Generale for the acquisition of Lyxor.
This asset manager believes that the proposed acquisition will improve the firm’s key expertise, mainly in the fast-growing ETF market, and generates substantial value.
Outlining the value of the imminent deal with Lyxor, Mr Perrier added: “The acquisition of Lyxor will be a new driver of growth. Such strong performances prove that, since its creation, Amundi's development strategy has been relevant, consistently implemented, and disciplined in its execution. This strategy has made Amundi the European leader and a recognised global player.”
Completion of the transaction is expected no later than February 2022.
Mr Perrier is set to to hand over general management of the firm to Valérie Baudson, and succeed Xavier Musca as chairman of the board of directors.
He said: “As I prepare to hand over general management to Valérie Baudson, and succeed Xavier Musca as chairman of the board of directors, I would like to thank Xavier for his support, and all of Amundi's employees for their contribution to the company's success.”