Funds News

Amundi and BNP vie for SocGen asset manager Lyxor - sources

LONDON/FRANKFURT, Nov 17 (Reuters) - Europe’s largest asset manager Amundi and BNP Paribas are among a group of bidders exploring tentative offers for the 150 billion euro fund management business of Societe Generale, three sources told Reuters.

Wall Street giant JPMorgan and Boston-based financial services firm State Street Corp have also expressed interest in the business, known as Lyxor, as has Deutsche Bank’s asset manager DWS, two of the sources said, speaking on condition of anonymity as the matter is confidential.

The sale, which is expected to start this year, will see Societe Generale handing over the keys to Europe’s third largest provider of exchange-traded funds (ETF) with some 150 billion euros ($178 billion) in assets under management.

Reuters reported on Sept. 20 that the French bank had hired Citigroup to oversee the sale.

Societe Generale, Amundi, BNP Paribas and JPMorgan declined to comment. Spokesmen at DWS and State Street Corp were not immediately available.

Societe Generale, France’s third biggest bank, swung back into profit in the third quarter after two consecutive quarterly losses, helped by a rebound at its equity derivatives business.

The bank’s boss, Frederic Oudea, who took the reins in 2008 and is the longest-serving chief executive of any large European lender, has come under mounting pressure to overhaul Societe Generale’s retail and markets activities and sell both its credit and equity structured products businesses.

The sale of Lyxor is expected to be worth 500 million to 700 million euros ($830 million), the sources said, adding that the final price would hinge on the specific products that will be carved out of the bank.

French asset manager Amundi is seen as the natural buyer for the business but will face competition on its home turf from BNP Paribas Asset Management, the sources said, adding that no deal was certain.

“Societe Generale is aware of Amundi’s interest but they’re looking to run a narrow auction to secure the highest price,” one of the sources said.

Europe’s exchange-traded fund market has become a global battleground for some of the largest investment banks including JPMorgan which is keen to boost its ETF trading capabilities, the sources said.

In September, Morgan Stanley won approval from the U.S. Federal Reserve to acquire discount brokerage E*Trade Financial Corp for $13 billion in an all-stock deal. ($1 = 0.8427 euros) (Reporting by Pamela Barbaglia in London and Arno Schuetze in Frankfurt; Additional reporting by Gwenaelle Barzic in Paris and David French in New York; Editing by David Clarke)