Amundi, the green turnaround is not enough. «Stop to super remunerations of managers»
di Alessandro Graziani
5' di lettura
With more than € 1,650 bn of AUM, Amundi confirms in 2019 to be the first European asset manager in the top 10 worldwide. Its growth will still be organic, but without excluding the possibility of new opportunistic acquisitions after Pioneer from Unicredit, with a focus on Europe and Asia. Amundi is a global leader in ESG investments too, with more than € 300 bn of responsible investments. In this exclusive interview for Il Sole 2 4Ore you find Yves Perrier's, Amundi CEO, opinion on the main themes involving the sector.
Asset management, on a worldwide level, is facing ESG thematics/topics and more specifically, climate change. Amundi is listed on the Stock Exchange and is controlled by Crédit Agricole which, in France, is known as the “banque verte”. How are you tackling ESG? Which objectives do you have?
Since its creation in 2010, Amundi has always been a pioneer considering Responsible investment as one of its founding pillar. We now are recognized as a global leader with more than €300bn invested in this regard and we have launched several green bonds funds with very prestigious partners such as IFC on the emerging markets, IEB on the European private debt and AIIB in Asia. We took part also to the work group launched by the MITI to set up ESG in Japan.
In October 2018 you presented your three-year plan. Which are its “green” objectives?
This plan includes the explicit inclusion of ESG criteria in the management of all the Group's open-ended funds of active management within 2022, the doubling of the amount raised to finance energetic transition and those of our assets under management in passive solutions with ESG criteria and climate related.
The change of attitude of investment funds towards climate change is reinforced through Blackrock adhering to “Climate Action 100+” organization where Amundi was a joiner since the beginning. From a concrete point of view, how do you implement the “new” (ESG) investment policy? Or how do you implement divestment from some sectors?
The ESG implementation is done through two axes. Firstly, we developed our own in-house ESG rating process based on the “best in class” approach aiming at underweighting - when the rating is bad – or overweighting –when the rating is good – the issuer in or investment process, or even exclude in some cases. This rating, adapted to each sector of activity, aims to assess the dynamics in which companies operate. We implement it with discernment, taking into account the specificities of each country. We raise also money to finance projects linked to energy transition (green bond funds or infrastructure) or with social impact.
Does your participation to shareholders meetings of those companies which are laggards with the ESG transition become more incisive already in 2020?
We have just issued our recommendation to companies for 2020 : we emphasise that our votes will take into account their contribution to energy transition on the one hand and to strengthening social cohesion on the other. For example, we will take into account the pay ratio (ratio between the CEO compensation and average compensation).
Among those funds which haven't adhered to the green transition yet there are US giants such as Vanguard, the leader in passive management. Can the fight against climate change succeed if the asset management industry doesn't act in the same direction as a whole? And how relevant is governments' attitude toward this issue?
The fight against global warming is a global issue on which everyone must mobilize, first and foremost governments. Governments must define energy policy and regulatory measures such as carbon taxes. Then companies and the financial sector must mobilize. Asset managers have a major role to play, particularly at the shareholder level, by having a voting policy that encourages company directors to resolutely move in this direction.
Amundi some years ago has scaled up through Pioneer acquisition. You are the biggest European asset manager, but you are far (in terms of AUM) from the US giants. Do you envisage to keep growing through further acquisitions, maybe in the USA?
Amundi is a great story of development. Its assets under management and profitability have increased 2.5-fold since its creation in 2010. Listed on the stock market since 2015, its market capitalisation has doubled to €15 billion. Three quarters of this growth has been achieved through organic growth, which has been and remains in its DNA. In addition, its development has been primarily international, which today represents 60% of its assets under management. Two regions have been given priority: Europe, which is our natural market, and Asia, which has become our second domestic market and where we now manage $300 billion.
Concerning acquisitions, we remain attentive to any opportunity not for a question of size but if it reinforces our business model and consequently our development capacity.
Are you interested in growing in the passive fund management? Would you be interested in buying Lyxor, which has a relevant market share in Europe, provided that SocGen sells it?
Passive management is a good example of Amundi capacity to develop first by organic growth : this business began from zero in 2010 and now show €133bn of assets under management and we are the 5th ETF provider in Europe. We plan to accelerate this business in all zones where we are already present. As far as I know, Lyxor is not for sale.
You have been recently authorized to operate in China through a company where you can have the majority stake (51% and more). China has huge potential. What do you think is the timeframe necessary to grow there?
Amundi is the first foreign player to obtain the approval of the Chinese banking regulator to create a JV in Wealth Management with a subsidiary of Bank of China (4th-largest Chinese bank) with a majority stake.
This partnership will supplement and accelerate our development in China, enabling us to address the two largest asset management segments: Funds Management with ABC and now Wealth Management.
China is a big and growing market with a growth of 10-15% per year.
From China to Italy: in these days the coronavirus effect is outbursting. What do you think can be the implications for the global economy and the financial markets?
First of all, we would like to express our sympathy and solidarity to all Italians affected by this epidemic.
The effects of coronavirus will impact the economy, but broad implications will depend on duration of emergency measures and of the most acute phase of the crisis. Encouraging news from abroad, with the situation gradually coming back to normality in China, would probably temper the negative impact
In this case we will just have a “growth lag”. Nevertheless, if it spreads geographically and over time, we can expect a serious damage to growth.
In any case, in the long term, companies will have to review their supply chain and way of producing. Coronavirus story add to our conviction that the pick of globalization is behind us and we will see a renewed focus on national champions and domestic themes.
You are among the major investors in Italian BTPs. Any fears about Italy risk and the excessive level of public debt?
Italy has all the capacity to overcome this difficult moment. Its economic fundamentals remain solid: beyond a possible transitory effect, we remain convinced that Italy will return to growth.
Similarly, we have no concerns about its debt sustainability: the primary budget surplus and the very stimulative monetary conditions are very reassuring elements. We are natural investors into BTPs and we see value in them following recent tensions.