An announcement here, talks, rumours and speculation there. Europe's asset management industry is on the move. The consolidation that has been expected for years has picked up speed, driven by players from France. BNP Paribas AM (BNPP AM), for example, is in the process of finalising the takeover of Axa Investment Managers (Axa IM) for 5.4 billion euros by the middle of the year. Natixis Investment Managers (IM) and Generali Investments, in turn, announced a merger of equals in January.

This is unlikely to be the end of the story. Observers expect Amundi and other players to react to the two mergers, which will shift the balance in Europe. This is because the asset and wealth management industry, which is exposed to the uncertain geopolitical environment, increasing inflationary pressure, high interest rates, weaker growth and squeezed margins, continues to grow. On average, assets under management worldwide are expected to increase by 5.9% per year to 171 trillion dollars by 2028, up from 129 trillion dollars in 2023, according to a forecast from PwC.

However, the pressure to consolidate is also increasing, particularly in Europe. This is because European players are lagging behind American industry giants such as Blackrock, Vanguard and Fidelity Investments in terms of assets under management. They also have some catching up to do compared to their US competitors when it comes to private markets offerings, the new big topic on the investment scene. In addition, there are high costs for digitalisation, new technologies such as artificial intelligence (AI) and legal compliance. This is not a problem for larger players, but it is for smaller and medium-sized asset managers, especially as the US giants are increasingly trying to get involved in the European market.

The takeover of Axa IM and the recently announced acquisition of the Swiss Thaler Bank by Indosuez Wealth Management are therefore likely to be just the beginning of further consolidation. Other European banks and insurers are also considering how to proceed with their asset management. This is a question that BNP Paribas has also been asking itself for a long time, as the asset management activities of France's largest bank, with an AuM figure of 653 billion euros, only rank as medium-sized.

Growing, profitable asset managers with less than 100 billion dollars can be managed well, as can those with at least 1 trillion dollars given their economies of scale, notes Amundi boss Valérie Baudson. But it is difficult for asset managers in between. According to a study recently published by the specialist magazine „Funds Europe“ on the 200 largest asset managers operating in Europe, the assets under management of the European players in the ranking average 249 billion euros. In contrast, the American competitors operating on the old continent have assets under management totalling 886 billion euros. French asset managers have the highest average assets under management, mainly thanks to Amundi.

Observers in Paris speculate that Amundi could now respond to the mergers of its smaller French competitors with a major takeover. The Crédit Agricole subsidiary acquired the Swiss private market specialist Alpha Associates and the wealth tech company Aixigo from Aachen in 2024, and has just merged its American activities with those of its new strategic partner Victory Capital.

In contrast, the largest pure-play European asset manager put talks with Allianz Global Investors (AGI) on hold at the beginning of December after more than a year, due to disagreements over the control of the merged company. Amundi had previously also spoken to Axa IM. The Crédit Agricole subsidiary, with assets under management totalling 2.24 trillion euros at last count, could now be ready to break cover. The merger of BNPP AM with Axa IM and Natixis IM with Generali Investments could lure it out of hiding.

The takeover of Axa IM will create a new European asset management giant with assets under management of 1.5 trillion euros. The planned merger of the BPCE subsidiary Natixis IM with Generali will create a heavyweight with combined assets under management of 1.9 trillion euros. euros. However, the Italian government and some Generali shareholders are now positioning themselves against the merger with a French competitor. According to reports, Ivass, the supervisory authority responsible for insurance companies, has just requested additional information on the planned merger.

Meanwhile, Amundi is looking around for further takeover opportunities. Amundi is a potential consolidator, Valérie Baudson recently told the „Financial Times“. „We are looking at so many dossiers," she said. "But you have to wait until a favourable constellation arises.“ After all, potential mergers and acquisitions must fulfil the asset manager's strict criteria. The return on capital should be over 10%. At the same time, the expertise of the potential acquisition targets and merger partners must strengthen or complement Amundis or improve its geographical presence.

Amundi is under no pressure to negotiate a new acquisition, says Baudson. The asset manager is growing significantly as it is. It must now first negotiate with Unicredit about the agreement concluded in 2017 as part of the sale of the former Unicredit asset management subsidiary Pioneer for the distribution of its products in Italy, Germany and Austria. Although it does not expire until 2027, Unicredit would like to recalibrate it.

According to media reports, Italy's second-largest bank is now looking for alternatives to Amundi, possibly also in response to Amundi's parent company, Crédit Agricole, not supporting its takeover bid for Banco BPM. Crédit Agricole is BPM's largest shareholder.