The boss of France’s Natixis is looking out for worldwide asset managers to purchase and will listing its lately scandal-hit division to construct firepower for a big buy.
“We’re clearly the consolidators of this trade,” chief govt Nicolas Namias advised the Monetary Instances, including that “Asia is for positive an space for growth”.
Namias added that he had “strategic manoeuvrability” and will “listing the asset administration arm to finance an enormous M&A venture”.
The group’s asset and wealth administration actions — the second-largest in Europe by belongings beneath administration after French rival Amundi — are at present centred in Europe and the US.
Namias, who has been on the helm of Natixis for a 12 months, is searching for to rework the fortunes of the corporate after it confronted intense scrutiny over its high-risk urge for food and was dogged by losses, together with at its beleaguered London-based subsidiary H2O Asset Administration.
In 2019, the Monetary Instances revealed that H2O, which was beforehand the star performer in Natixis’s steady of asset managers, held greater than €1bn in illiquid bonds linked to the controversial financier Lars Windhorst. Panicked traders withdrew billions of their cash and regulators subsequently compelled H2O to quickly droop buying and selling in a sequence of its funds due to issues over the valuations of investments.
Natixis has been searching for to sell its majority stake in H2O, which was additionally hit arduous by the pandemic, again to its administration since late final 12 months, although this has thus far confronted obstacles from regulators.
Namias stated H2O had now taken over the distribution of its personal merchandise and would not be included in Natixis’s monetary outcomes, however declined to touch upon why the French funding financial institution has been unable to shed its stake and whether or not it was contemplating different patrons.
A director and two gross sales representatives from Natixis have joined H2O to arrange a proprietary distribution group that the corporate is seeking to develop to fifteen folks.
Despite the reputational hit attributable to the H2O scandal, Namias defended the asset supervisor’s multi-boutique mannequin, whereby it takes majority stakes in smaller funding companies and gives them its advertising and distribution may.
Natixis was now the most important funding supervisor on the planet to have this type of decentralised enterprise construction, he stated, which enabled the corporate to profit from totally different funding methods and abilities, as long as there are good programs of compliance in place.
Natixis changed its chief govt last year after a two-year time period marked by doubts over the financial institution’s enterprise mannequin and danger administration, and was taken private this year by its largest shareholder and French mutual financial institution, BPCE.
As a part of a sweeping restructuring of its enterprise operations, the corporate’s insurance coverage and funds arms — representing about 20 per cent of the corporate’s gross sales and staff — have been transferred to BPCE.
This has left Natixis to concentrate on two core segments — company and funding banking and asset and wealth administration, decreasing its worker depend from 16,300 to about 12,000.
Within the first half of the 12 months, gross working earnings throughout each sectors — now named “International Monetary Companies” — greater than doubled to €1.1bn, supported by the post-pandemic restoration. The asset and wealth administration division elevated its gross working earnings by 41 per cent to €400m, when excluding H2O asset administration, however by solely 12 per cent together with the funding subsidiary.
Natixis has additionally sought to slash its publicity to dangerous merchandise and diversify its areas of company banking experience so it’s much less uncovered to volatility in sectors equivalent to oil and gasoline, and aerospace. As a part of this drive, it has expanded into sectors together with well being.
“We are going to by no means be the most important company and funding financial institution in all geographies,” Namias stated, however “we will enlarge the variety of sectors [as part of] a ‘selective diversification’.”
Natixis’s publicity to fairness derivatives, which led to hundreds of millions in losses in 2018 and 2020, had additionally been decreased, Namias stated, though the financial institution has not stopped dealing in these merchandise altogether given that there’s nonetheless robust demand from purchasers.
“The enterprise of banking is to not keep away from danger however to decide on your dangers properly,” he stated.
