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The owner of France’s Natixis Investment Managers and Italian insurer Generali are close to announcing an agreement to create an asset management joint venture that would bring together two of the biggest European names in the sector.
Under the terms of the tie-up, BPCE and Generali Investments will combine their asset management operations in a 50-50 joint venture, people familiar with the situation said. A non-binding preliminary agreement could be reached as early as next week. It would still need to be approved by the relevant unions and authorities.
Woody Bradford, the head of Generali’s investment division, is expected to be appointed as chief executive, while Nicolas Namias, chair of Natixis and chief executive of its owner BPCE, is set to be appointed as chair.
The deal comes as consolidation is sweeping across the industry, with groups searching for scale in the face of declining margins, the need for investment in technology and the growing might of the largest US participants.
Natixis has €1.2tn in assets under management and operates a multi-boutique model, which owns majority stakes in 15 active managers that continue to be run by their original management.
Generali had €632bn in assets under management as of September 30, run across a platform of 12 affiliated asset management firms investing in public and private markets, of which about 40 per cent is managed for third-party clients and the remainder for its parent insurer.
European banks, insurers and independent groups are evaluating their commitment to asset management, weighing up whether to double down, partner with others in pursuit of scale or withdraw from the sector.
Pulling off full-blown mergers and acquisitions in asset management is fraught with difficulties and firms are increasingly turning to strategic partnerships. The Financial Times revealed in November that the two sides were exploring a potential tie-up.
The deal would allow both BPCE and Generali to retain exposure to their earnings from asset management. It is seeking to combine a capital-rich insurance company that is growing but needs more asset management products, with a business that has strong third-party distribution in retail and wholesale markets, and a number of well-respected boutiques, including Harris Associates and Loomis Sayles.
For Generali, which receives inflows each year from its life insurance business, it makes sense to invest this money in an asset manager where it has an economic interest, rather than giving it to an external one to manage.
Generali is also expected to continue to provide seed capital to create new funds and expand existing strategies.
The tie-up with Generali would be the latest deal struck by BPCE chief Namias since he took over at the head of the French lender in 2022, after BPCE also acquired Société Générale’s Equipment Finance unit last year for €1.1bn.
Meanwhile, Generali set out it stall in asset management with the 2023 acquisition of US group Conning from Cathay Life.
Generali’s chief executive Philippe Donnet told investors in August that the Italian insurer would focus on building a global asset management platform and remained “convinced of the power of the combination between life insurance and asset management”.
Last year French insurance group Axa agreed a deal to combine its asset management business with that of BNP Paribas Asset Management after concluding that it was subscale. Axa had previously explored an asset management combination with Natixis.
Germany’s Allianz and French asset manager Amundi have held talks over a potential transaction but paused discussions in December amid disagreements over how best to structure at potential transaction, the FT reported.
BPCE, Natixis and Generali declined to comment.
