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Amundi Buys Swiss Firm in €350 Million Private Markets Push

(Bloomberg) -- Amundi SA has acquired Swiss asset manager Alpha Associates AG in a €350 million ($377 million) deal as part of its strategy to expand in the rapidly growing private markets sector.

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The French company will pay €160 million upfront and as much as €190 million in milestone payments tied to the Zurich-based firm’s growth over the next five years, Chief Executive Officer Valerie Baudson and Deputy CEO Nicolas Calcoen said on a call with reporters.

The deal will help Amundi expand its footprint across assets in private debt, infrastructure, private equity and venture capital to about €20 billion, and bolster its presence in Switzerland, Germany and Austria.

Alpha Associates, with €8.5 billion in assets, was “interesting because it not only caters to institutional clients, who are priority customers for these assets, but also to the potential needs of private clients,” Baudson said. Amundi expects the deal to generate more than 13% in return on investment in three years, including revenue synergies.

The transaction is the latest in a raft of acquisitions by global money managers wanting to expand their offerings in private and alternative assets. Last month, BlackRock Inc. agreed to buy Global Infrastructure Partners for about $12.5 billion. Amundi, which has become Europe’s largest asset manager through a string of purchases — including Pioneer Investments and Lyxor — has earmarked about €2 billion for mergers and acquisitions or exceptional payouts by 2025.

What Bloomberg Intelligence Says

Amundi’s €350 million acquisition of Swiss-based private-debt, infrastructure and equity firm Alpha Associates aims to boost EPS by 2% after three years, and highlights asset managers’ stagnating margins. Amundi’s 2023 fee margin slipped to 17.7 bps from 17.8 bps, so earnings advances will rely on boosting volumes, but Julius Baer’s recent exit from private debt shows the risks of alternative investments.

— Kevin Ryan, BI insurance analyst

In a separate statement detailing fourth-quarter earnings, the Paris-based asset manager reported €19.5 billion of inflows, surpassing the €12.6 billion that analysts tracked by Bloomberg anticipated. The increase was driven by €11.2 billion of inflows into the firm’s treasury products.

But shares of Amundi fell as much as 5.3% on Wednesday in Paris after revenue and pretax profit came below analyst expectations.

Assets under management increased for a fifth straight quarter and now exceed €2 trillion, inching closer to its 2021 historic high.

The firm’s adjusted net income in the quarter rose 3.4% from a year earlier to €313 million, beating estimates. Its adjusted cost-to-income ratio slightly deteriorated to 52.8% in the fourth quarter, but was in line with analysts’ expectations and Amundi’s aim to keep it below 53% in 2025.

In Asia, a key region for Amundi where it aims to have €500 billion in assets by 2025, the firm saw inflows of €7.5 billion over the period, bringing its total local assets to €399 billion at the end of December.

Amundi plans to propose a €4.10 dividend at its annual general meeting in May.

(Updates with shares in seventh paragraph.)

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