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The clouds of governance in Amundi let a ray of sunshine pass through. The € 13 billion manager has announced a new CEO after presenting strong annual results. The rise of the current boss, Yves Perrier, to president is not an example of good governance, but his presence can help Valérie Baudson.
For an asset manager keen to tout her ESG credentials, it seems a bit odd to move your chief executive to the presidency, which runs counter to generally accepted good governance practices. It’s true that Baudson, who currently runs Amundi’s passive business, as well as the German and Spanish units, is a safe pair of hands, having been on the group’s executive committee since 2013. But the remodel still means that Amundi values continuity more than external scrutiny and new ideas.
It’s probably understandable, given Perrier’s enviable track record. Having increased its assets under management to € 1.7 trillion, record fourth-quarter net income enabled it to largely meet the goal of doubling annual net income to € 962 million since Amundi’s public offering for sale. in 2015. Total shareholder return over the past five years stands at 133%, easily outperforming UK peers Schroders and Standard Life Aberdeen, according to Refinitiv Datastream.
Driving Perrier in the back seat can also be helpful. In recent years, it has opened a path of mergers and acquisitions, buying the Italian Pioneer from Unicredit for 3,500 million euros and the asset management business of Banco Sabadell for 430 million, which has made Amundi one of the few managers of European assets that has made large, successful acquisitions.
Larger operations are likely to follow in the future. Amundi still needs to diversify beyond France, which accounts for more than half of the assets under management. Acquiring, for example, the German DWS, with 793,000 million euros in assets, is an option. Strengthening in Asia, which represents less than a fifth of the French group’s assets, should also be a priority.
Baudson will also have to cope with continued pressure on fees and the shift to passive investing, dominated by BlackRock. The acquisition of Lyxor, owned by Société Générale, would more than double Amundi’s market share in Europe in equity and credit exchange-traded funds, according to Morningstar data.
The shares rose 3% on Wednesday, indicating that shareholders may not be upset by Amundi’s governance failure. If Baudson can continue Perrier’s tradition of merger success, they have good reason to be hopeful.