A small revolution shook European lists this morning, slightly below parity after the rallies (seven sessions up out of the last eight) that drove the Eurostoxx 50 index to the highest levels. It is the ideal setting to celebrate the sale of Lyxor, the company controlled by Société Générale who was the first in 1998 to import the ETF formula into the old continent, ad Amundi, the flagship asset management of Crédit Agricole, strong in Italy of the assets that were of pioneer, given at the time by Unicredit.
If the negotiations, announced this morning by the two groups, are successful (final date, February 2022) Amundi will become the European leader in ETFs, with a total of 142 billion euro of assets under management and a market share of 14% in Europe in one of the sectors where the interest of investors is most concentrated, in direct competition with BlackRock. It is based on a total consideration of 825 million euros, equal to 755 million euros excluding excess capital, as many as needed to acquire one of the main players in the ETF market: 77 billion euro of assets under management, third operator in Europe with a market share of 7,4%. And, above all, strong know-how in active management (47 billion euro of assets under management) which complete the package of 124 billion in assets involved in the transaction.
Various factors underlie the operation which is part of a market trend that has been going on for some time:
- the ETF investments they pursue smart beta strategies (i.e. aimed at mitigating stock market volatility and favoring an approach to quality and a high return in terms of dividends) are also in great shape in the early stages of the second quarter of 2021 as emerges from the interest aroused by some Big companies, from Enel to Volkswagen who are able to guarantee promising coupons from the next coupon campaign. Funding for ETFs following this type of strategy grew by 15% in the first week of April.
- In particular, i products investing in stocks that meet a set of European smart-beta criteria raised $806 million in the week ending April 5, up from $699 million in the eighth prior, according to data compiled by Bloomberg. In this context, the tendency is triggered to favor value stocks over growth stocks, the protagonists of the market until a few months ago. ETFs investing in value stocks recorded the largest inflow with $576 million.
- In this context, EDFs are one of the keys to compete in a world increasingly under pressure due to the advance of passive low-cost products and the costs associated with adapting to the new regulations introduced after the 2008 financial crisis. here theacceleration of M&A in the belief that, in the face of increasing costs, only "Big is beautiful".
- As far as SocGen is concerned, the sale is part of a strategy on savings products which plans to operate in an open architecture, proposing investment and asset management solutions for its customers through partnerships with external asset managers, sacrificing the product factory. In this context, the institute is preparing to announce the creation of a "Wealth & Investment Solutions" within its bank, including the assets of Lyxor that are not part of the sale.
Finally, it can only be noted how the creation in France of the European leader of ETFs and passive asset management more generally, will help strengthen Paris' position as a potential leading financial center in the post-Brexit season. On Intesa the burden of responding.
