Amundi CEO denies jobs ‘bloodbath’ will follow Pioneer deal
The French fund house is set to become the eighth-largest asset manager globally
It is hard to imagine Yves Perrier, the chief executive of Amundi, Europe’s largest asset manager, getting excited.
I meet the 62-year-old the same morning Amundi posts net inflows of €62bn for 2016, not quite a record but €22bn more than what was promised when the French fund house listed in 2015.
The influx of cash is all the more impressive when compared with the problems facing Amundi’s competitors. Just days before, Henderson reported its first yearly outflows since 2012 after the UK’s third-largest listed fund company suffered £4bn of net withdrawals in 2016.
The same month Aberdeen Asset Management posted its 15th consecutive quarter of net withdrawals, bringing total outflows to more than £100bn since clients first began pulling money from the Scottish investment house four years ago.
“I am satisfied,” says Mr Perrier flatly. “Things are going a bit faster than I had anticipated.”
The inflows meant Amundi eclipsed the €1tn mark for assets under management last year, and its €3.5bn acquisition of Pioneer Investments from UniCredit, the Italian bank, will move assets closer to €1.3tn when the deal closes before the summer.
But cuts will have to come first. The company announced cost savings of €180m when the merger was revealed in December. Admin, IT and back-office functions will all be streamlined.
“I have seen some in the British press say the deal will be a bloodbath for staff or some kind of slaughter. It won’t,” says Mr Perrier, who has been chief executive of Amundi since it was born out of the merger of Crédit Agricole and Société Générale’s asset management units in 2010.
Four hundred and fifty jobs will go from a total pool of 5,000 staff. Many would consider that a bloodbath of sorts.
“We can carry this out without any big ‘social’ plan, and for a very simple reason: last year the turnover of all staff was 175 people. If you multiply by two, you have more than 300. That means two-thirds [of all job cuts] will come just from staff turnover,” he says.
Mr Perrier, a once-talented footballer who was offered a contract with French team Olympique Lyonnais, has experience of cutting staff — practical knowledge he seems to relish.
“When we created Amundi in 2010 we announced €120m of cost synergies but in fact generated savings of €150m. And in 2003, I was in charge of the creation of the investment bank of Crédit Agricole from the merger of Indosuez and the investment bank of Credit Lyonnais.
“We announced a reduction in staff of 3,000 people, half in France, half abroad, and we delivered. I know how to do this,” he says.
I ask him if staff at Pioneer will bear the brunt of the cuts, given the fierce reputation of trade unions in France and his own allegiances to Amundi.
“As I have mentioned, I have implemented two mergers where we cut staff in France and abroad. From that I found it took three or six months longer to reduce staff in France than the UK, for example. But it was easier and quicker in France compared with Japan or Germany.”
He adds: “Any cuts will be based on fairness and efficiency, not on labour laws or loyalties.”
But staff at Pioneer are expecting harsher treatment as a result of the sale and a number of high-profile employees have already left the company.
In December it emerged that two senior staff at Pioneer had been suspended pending an investigation into allegations that they attempted to set up a rival investment business to which they could potentially take clients.
“Amundi is going to slaughter us,” one employee told FTfm at the end of last year. “They don’t need employees, they need assets.”
The deal will, however, bring an end to years of uncertainty for clients and staff at Pioneer, which was first put up for sale more than six years ago. Amundi emerged as a potential buyer at the time, but the eurozone crisis triggered fears that a foreign owner of Pioneer would buy fewer Italian sovereign bonds.
Mr Perrier says: “The integration will be made, not like an acquisition, but like a merger. We have set up a steering committee to oversee this, which is co-chaired by myself and Giordano Lombardo, the chief executive of Pioneer. That steering committee is made up of Amundi and Pioneer staff, which is key. As I said, we will make the choices based on efficiency and fairness.”
“But let me add this”, he continues, “I had a meeting with 100 key managers within Pioneer and Amundi last week, and I told them this: you are not synergies, you are assets.”
The deal will make Amundi the eighth-largest asset manager globally but the merged unit will still trail BlackRock, the world’s largest investment house, by some margin in terms of assets under management.
The US fund house took in net inflows of $202bn in 2016 and grew its assets under management by 11 per cent year on year to $5.1tn.
Yet while inflows of client money were up, BlackRock’s revenues and profits fell compared with 2015. Revenues for the year dropped 2 per cent, and operating income came in at $4.57bn, also down 2 per cent.
How important is it for Mr Perrier to catch up with BlackRock?
“Some journalists or investors say Amundi is the European BlackRock. No, we are not.
“BlackRock has €5tn of assets, we have €1tn. And if you bear in mind that the American market represents 50 per cent of global assets, and that we have only a small presence in the US market, then it is clear we will never be number one in the world.
“But frankly speaking, it’s not a problem. What Amundi does is my business. What BlackRock does is theirs.”