Gunning for Billions: Amundi Cranks Up the Stakes in German Private Markets
A Frankfrut Conversation with Christian Pellis and Petra Salesny
By Riff-Raff, Frankfurt
Investment firm Amundi plans to double its private market assets in Germany.
With a penchant for packing a punch, Amundi, the French heavyweight in asset management, aims to inject a whopping 5 billion euros into its German Private Markets division. According to the big boss of Amundi Deutschland, Christain Pellis, this ambitious target focuses solely on institutional clients, with private investors expected to follow suit via the Eltif 2.0. However, Pellis remains mum about precise estimations for the latter group's potential.
Rumors abound that Amundi could achieve its institutional growth goal should the French swoop in to snag Allianz Global Investors (AGI). As the insurance titan Allianz looks for a partner or buyer for its asset manager, Amundi stands high on the list of contenders, despite recent halts in negotiations reported by the financial doyen Bloomberg.
AGI brings a hefty 95 billion euros in private asset classes such as Private Equity, Private Debt, Real Estate, and Infrastructure to the table. Compared to Amundi's 70 billion euros, a successful acquisition would catapult the French organization to new heights. As of now, M&A is already shaping the growth plans in the German-speaking region, with Amundi making strategic acquisitions in the DACH region, including the recent purchase of Aachen technology company Aixigo and Swiss asset manager Alpha Associates earlier this year.
Petra Salesny, Amundi Managing Director, explains their strategy: "We invest in Private Equity funds, buy secondaries, and make direct co-investments." Alpha Associates employs a multi-manager approach, investing as a fund of funds in other private market funds. Approximately a fourth of Amundi's assets are attributed to this strategy, with the rest of their 70 billion euros on the table coming from Africa, Asia, and the Americas.
Despite the absence of a direct business in Germany, Pellis is confident Amundi can still deliver a triumph with their current offerings. The future of Amundi's German Private Markets division remains flexible, open to growth through both M&A and organic development.
A cursory glance at the insurance sector reveals several significant players ceding their private market business, such as Swiss Life, Allianz, and even the French giant Axa, who sold their investment manager to BNP Paribas. Salesny remains unconvinced by the notion that insurers face systemic problems with the private markets business: "Every insurance company pursues its unique strategy."
Pension institutions, at least according to a joint survey by Amundi and Create Research involving 157 global pension institutions with a whopping 1.97 trillion euros in assets, see ample potential in private market investments. Approximately 75% of respondents are already invested in private market assets, with intentions to continue investing heavily in the future. The asset class of Private Debt garners the most support, with Direct Lending, Real Assets, and Distressed Debt being the most popular investment strategies.
This push towards democratizing private market investments has brought about the European Long Term Investment Fund (ELTIF), allowing retail investors to buy in and start investing incrementally, granting them redemption rights quarterly. However, investments in the private markets will still remain less liquid than traditional assets. Salesny believes that educating investors about these risks is crucial, given that the entry barriers for retail investors have significantly decreased with the revised ELTIF, with the mandatory minimum investment sum now set at just 1,000 euros.
- Amundi plans to invest 5 billion euros into its German Private Markets division, focusing on institutional clients with the potential for private investors to follow via the Eltif 2.0.
- Amundi is rumored to be a prime contender for acquiring Allianz Global Investors (AGI), which manages 95 billion euros in private asset classes like Private Equity, Private Debt, Real Estate, and Infrastructure.
- If Amundi successfully acquires AGI, it would significantly boost their assets, currently at 70 billion euros.
- Amundi's strategy involves investing in Private Equity funds, buying secondaries, and making direct co-investments, with approximately a fourth of their assets attributed to this strategy.
- Despite the absence of a direct business in Germany, Amundi remains confident in delivering success through both M&A and organic growth, following the trend of insurers ceding their private market business to other entities.
