With new representation for Australia and New Zealand, launched last week, Amundi Asset Management, Europe’s largest funds management firm, has shone a light on three key areas of its broad-based global offering: US-denominated asset classes, ESG strategies and passive management.
While the manager, which has about EU1.45 trillion (A$2.31 trillion) under management, has doubled its Australian-sourced assets to almost $2 billion over the past seven years, much of this has been in its core fixed income strategies, which tend to be low margin from the manager’s perspective.
Armed with new offerings, such as emerging markets and European equities, through its merger with Pioneer Investments in 2017, Amundi’s US-domiciled strategies and funds include multi-asset and absolute returns, placing a greater emphasis on alpha generation and outcomes orientation.
Amundi has appointed third-party marketer Shed Enterprises, as reported last edition, to oversee the transition in distribution. Eric Bramoullé, the Singapore-based chief executive for southern Asia, spent most of last week in Australia meeting with Shed management and clients.
Amundi is looking to broaden both its investment and geographical focus. Currently about 60 per cent of its assets are in bonds and treasuries, but it’s EU253 billion (A$403 billion) in equities, equal to 17 per cent of the total, is indicative of a strong capability. The firm has 18 per cent in multi-asset strategies, a lot of it due to Pioneer, and 5 per cent in real assets. “You could also say we’re an equities house,” Bramoullé said.
Geographically, France accounts for 30 per cent of assets (excluding assets managed for domestic retail bank partners), Italy 12 per cent and the rest of Europe 11 per cent. Asia, including Australia, accounts for 14 per cent and North America 4 per cent. Asia and the US clearly have a lot of growth potential for the firm, with Asia being the immediate priority. “Expansion has to happen in Asia,” Bramoullé said.
From a management perspective, Amundi splits the region into north Asia, including Korea, Japan as a standalone territory and south Asia, including Australia and New Zealand.
Bramoullé sees its ESG bent and capabilities as a competitive advantage, particularly in Australia and New Zealand, which have been stronger on the up-take than most of the rest of Asia. In October last, Amundi announced that it had set itself a goal to have 100 per cent coverage with its ESG principles, in terms of ratings, asset management and its shareholder voting process by 2021. It has an in-house team of about 20 doing ESG research and also uses various ESG specialist partners.
Bramoullé said that one of the challenges was there was no standard among ESG providers, but at least most institutional investors no longer questioned whether there was a trade-off between ESG and portfolio performance. Most now recognised adherence to ESG principles enhanced returns, especially over longer periods.
Amundi has a large internal team because it felt it needed to create its own database, he said, sourcing information from about 200 researchers across the group.
On the passive side, the firm has a range of index strategies, ETFs and smart-beta funds in Europe. It already does some Australian index management. Bramoullé admits that the index field is both competitive and price sensitive, but thinks it also presents an opportunity for Amundi in the region.
Sheridan Lee, founder and principal of Shed Enterprises, said that the challenge for her team was to focus on the capabilities, of many, that her new client offers which will be most sought-after by Australian and New Zealand institutional investors.
“Amundi really is a fabulous organisation with a long history,” she said. “It has so much to offer investors in every type of strategy imaginable. We will be doing our best to put as much as possible on show.”