Fee revenues receive M&A jump

Europe’s asset managers saw their revenues from fees jump by 6% in the last six months of 2017 compared to the previous half of the year.

Moody’s Investors Service said this was due to a combination of strong financial markets and fund flows.

The figure excludes revenues of firms that were brought into Moody’s research scope by merger or acquisition. Including these firms, the fee revenue figure jumped by 12.7% over the previous half-year.

Marina Cremonese, senior analyst at Moody’s, said: “About half of the [12.7%] increase in fees we recorded was due to the acquisition of asset managers previously outside of Moody’s surveyed group – for example the Janus-Henderson merger and the acquisition of Pioneer by Amundi.”

The other half was down to market appreciation, higher performance fees and positive net flows.

Bank-owned asset managers recorded the highest  increase in management fee revenue (18%) as they continued to benefit from their parent banks’ distribution networks.

Sales momentum continued during the period, with net inflows reaching €135 billion, equivalent to 1.5% of assets under management (AUM) at the beginning of the period. This compared with net inflows of €30 billion in the second half of 2016.

Moody’s said Amundi was notable as the largest flow winner, with €44 billion in net inflows during the six months, equivalent to 4% of its AUM at the beginning of the period. The new money was “fairly well” diversified in terms of client types and region.

Amundi – which posted a 20% net profit last year – also saw “a contribution” from third-party distributors in Europe, while its retail segment benefited from growth in Amundi’s international networks – particularly in Italy, which Moody’s said illustrated the benefits of a partnership with UniCredit.

UniCredit is the former owner of Pioneer Investments, which Amundi bought last year.

©2018 funds europe

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