AXA knocking on doors of French peers over asset management tie-up

PARIS (Reuters) - AXA has talked to BNP Paribas and Natixis in its search for a partner for its fund management arm, aiming to build a business with at least 1 trillion euros ($1.2 trillion) of assets under management, sources familiar with the matter told Reuters.

Logo of France's biggest insurer Axa is seen in front the compagny headquarter in Paris, France, August 4, 2016. REUTERS/Jacky Naegelen/File Photo

Under new chief executive Thomas Buberl, the French insurer is looking for ways to boost profitability at its asset management business, which has been hit by falling fees and rising costs during a period of historically low interest rates.

“AXA is talking with Natixis, with BNP. They also talked to Amundi, but talks are not currently intense with Amundi,” one of the sources said, referring to another French asset manager.

AXA AXAF.PA, Natixis CNAT.PA, BNP BNPP.PA, and Amundi AMUN.PA all declined to comment.

All scenarios are on the table. These include AXA possibly being a minority shareholder if it merged AXA IM with a bigger player, or being a majority shareholder if it tied up with a smaller one, the source said.

So far there are only discussions with French asset managers, though talks could be broadened out to include foreign companies, the source added.

AXA IM has 735 billion euros under management and is mainly focused on Europe. Natixis Global Asset Management had 834 billion euros under management at the end of June, while BNP Asset Management had 566 billion euros.

Jean-Baptiste Coiffet at Cognizant Business Consulting said AXA’s, BNP’s and Natixis’s asset management businesses would all benefit from increasing scale to better compete with the likes of Amundi.

Amundi, majority owned by French bank Credit Agricole CAGR.PA, recently acquired Pioneer Investments from Unicredit and has about 1.34 trillion euros of assets under management.

At an investor day last year, AXA did not disclose a specific strategy for its asset management division, which comprises the U.S.-focused AllianceBernstein (AB) and the more Europe-oriented AXA IM. Buberl said, however, that asset management was one of AXA’s four core businesses.

The company announced plans this year to list a minority stake of its life and asset management business in the United States, accelerating a shift in its portfolio toward property and casualty and health and protection business.

“AXA’s asset management operation hasn’t been very successful ... I think the market would look positively on that,” said Marc Halperin, senior portfolio manager at Federated Investors, referring to AXA’s overhaul of its fund management business. “And then they can focus simply on the insurance operation.”

Bloomberg reported earlier last week that AXA was reviewing options for its European asset management business, citing sources close to the matter. [nL4N1LV574]

Reporting by Matthieu Protard, Maya Nikolaeva and Jean-Michel Belot in Paris, Anjuli Davies and Simon Jessop in London; Editing by Mark Potter