This content is from: Portfolio

Amundi Makes All-Cash Offer for Pioneer

The French asset manager has put in a $3.8 billion bid to acquire Pioneer Investments from Italy’s UniCredit.

  • Imogen Rose-Smith

In the weeks after the troubled Italian lender UniCredit admitted in September that it was once again considering a sale of its money manager Pioneer Investments, Amundi quickly emerged as the most likely bidder for the franchise. On Monday the French asset manager made it official, announcing that it has put in a $3.8 billion, all-cash offer for Pioneer, which has $252 billion in assets under management.

The deal, which is expected to close in the first quarter of 2017, would make the combined firm the world’s eighth-largest asset manager, with a total of $1.4 trillion under management. The combined entity would be the largest asset manager in France and among the top three in Italy. The deal would also build up Amundi’s presence in the U.S.

“The acquisition of Pioneer Investments is a major step to anchor Amundi as the European leader in asset management,” Amundi CEO Yves Perrier said in a statement announcing the deal. “This acquisition will reinforce Amundi’s industrial model and will benefit our clients whilst creating significant value for our shareholders.”

A number of industry trends and headwinds — including fee pressure, the flight to passive and quantitative strategies, and regulatory changes — are causing a significant uptick in mergers and acquisitions on the part of long-only active managers as these firms seek to develop a global footprint and adapt to the changing competitive environment. This is a far cry from the glory days of active management, of which Pioneer was a part.

Pioneer was founded originally in 1928 by Philip Carret, an early leader in the field of value investing. Carret, who passed away in 1998 at the age of 101, was a friend to Warren Buffet and his father Howard — who had been Carret’s broker — as well as a former financial reporter and lover of solar eclipses. Pioneer still operates Carret’s original Pioneer Fund, the third-oldest mutual fund in the U.S.

Today the firm has investment offices in Boston, Dublin and London. UniCredit had been in talks to sell the manager, which it acquired in 2000, to the Spanish bank Santander, but that deal fell through in July after 20 months of negotiations — leaving Amundi, which had previously sought to acquire the firm in 2011, free to swoop in and make an offer.