2016 Top 3 Most Shocking Deals in Fund Management
When is $100 Billion AUM not enough? Welcome to the Fund Management Industry.
All eyes were on the Private Banking industry, having doubts if smaller Private Banks managing $10 Billion to $50 Billion have enough AUM and cost efficiency, or trying to improve Return on Assets (ROA) from 60 bps to 75 bps (0.6% to 0.75%).
- The Largest Investment Managers in 2016
- List of Global Top 50 Fund Management Firms 2016
- The Rewind: Fund Management in 2016
- The Rewind: Private Banks in 2016
We look at the 3 shocking deals in an industry where $100 billion AUM and 1.25% annual management fee might just not be enough too:
Deal #1 The Merger of Janus and Henderson
On 3rd October 2016, Janus and Henderson announced their merger to form Janus Henderson Global Investors that will create a combined total AUM of US$320 billion with a market capitalisation of US$6 billion. The merger will take place in Q2 2017, and is expected to have a cost synergy of US$110 million annually.
US$320 billion ASSETS
- Total Combined AUM: US$320 billion
- Janus AUM: US$195 billion
- Henderson AUM: £95.0 billion
The merger will be take place in a share exchange deal. Henderson and Janus shareholders are expected to own approximately 57% and 43%.
The new entity Janus Henderson Global Investors will apply for admission to trade on the NYSE as its primary listing, retaining Henderson’s existing listing on the ASX.
Janus Capital Fast Facts:
- Founded 1969
- AUM: US$195 billion (30 June 2016)
- HQ: Denver, United States
Janus is listed on the New York Stock Exchange (“NYSE”) under the ticker JNS.
Henderson Fast Facts:
- Founded 1934
- AUM: £95.0 billion (30 June 2016)
- HQ: London, United Kingdom
Henderson is dual-listed on the Australian Securities Exchange (“ASX”) and the London Stock Exchange (“LSE”), a member of the ASX 100 and FTSE 250 indices.
Expected Merger: Q2 2017
” Henderson and Janus are well-aligned in terms of strategy, business mix and most importantly a culture of serving our clients by focusing on independent, active asset management. I look forward to working side-by-side with Dick, as we create a company with the scale to serve more clients globally, as well as the strength to meet their future needs and the growing demands of our industry.”
~ Andrew Formica, Chief Executive of Henderson
“This is a transformational combination for both organizations. Janus brings a strong platform in the US and Japanese markets, which is complemented by Henderson’s strength in the UK and European markets. The complementary nature of the two firms will facilitate a smooth integration and create an organization with an expanded client-facing team and product suite, greater financial strength, and enhanced talent, benefiting clients, shareholders and employees.”
~ Dick Weil, Chief Executive Officer of Janus
Source: Official Press Release from Janus Capital Group and Henderson Group
Deal #2 Amundi to Acquire Pioneer Investments
2 months after Janus and Henderson announced the merger, Amundi signed an agreement with UniCredit to acquire Pioneer Investments for EUR 3.545 billion on the 12th December 2016.
Pioneer Investments has a total AUM of €222 billion and is owned by UniCredit, Italy’s largest bank.
EUR 1.276 trillion assets
With the acquisition, Amundi will become the world’s 8th largest asset manager with EUR 1.276 trillion assets. Amundi will also have a 10-year distribution agreement via UniCredit’s network in Italy, Germany and Austria.
Amundi will finance the acquisition with €1.5 billion from excess capital, €1.4 billion from rights issue and €0.6 billion of senior and subordinated debt.
Pioneer Investment Fast Facts:
- Founded 1928
- AUM: EUR 222 billion
- HQ: Milan, Italy
Pioneer Investment is not a public listed entity.
Amundi Fast Facts:
- Founded 2010 (Regrouped from Crédit Agricole and Société Générale in 2010)
- AUM: EUR 1.054 trillion
- HQ: Paris, France
Amundi is listed on the Euronext Paris under the ticker AMUN
Expected Deal Completion: 1st Half 2017
“This acquisition is fully in line with the selective acquisition strategy announced at the time of the IPO: Pioneer Investments will reinforce Amundi’s product expertise, broaden its distribution channels and networks, and generate significant synergies. It confirms Amundi’s position as a clear European leader in asset management, in terms of size and profitability.”
~ Xavier Musca, Chairman of the Board of Directors of Amundi
“The acquisition of Pioneer Investments is a major step to anchor Amundi as the European leader in asset management. This acquisition will reinforce Amundi’s industrial model and will benefit our clients whilst creating significant value for our shareholders. Pioneer Investments is a world class asset manager that has a highly complementary business and geographic profile. At Amundi we are all excited to welcome soon our new colleagues who will be part of a leading asset management group fully dedicated to serve its retail and institutional clients.”
~ Yves Perrier, Chief Executive Officer of Amundi
Source: Official Press Release from Amundi SA and Pioneer Investments
Deal #3 Standard Life and Aberdeen Asset Management to Merge
Not 2016 but just days into March 2017, Standard Life and Aberdeen Asset Management made the announcement to merge that will create the largest* asset manager in United Kingdom with a combined £660 billion assets.
£660 billion Assets
* Legal & General Group PLC and HSBC Holdings have larger AUM but have diversified financial businesses including banking.
The merger will be in a share exchange deal. Aberdeen shareholders would own 33.3 per cent and Standard Life shareholders would own 66.7 per cent of the Combined Group.
Standard Life Chairman Sir Gerry Grimstone would become Chairman of the Board of the Combined Group, with Aberdeen’s Chairman Simon Troughton becoming Deputy Chairman.
Keith Skeoch, CEO of Standard Life and Martin Gilbert, CEO of Aberdeen, would become co-CEOs of the Combined Group. In addition, Bill Rattray of Aberdeen and Rod Paris of Standard Life would become CFO and CIO respectively.
Standard Life Fast Facts:
- Founded 1825
- AUM: £357 billion (31st December 2016)
- HQ: Edinbugh, Scotland
Standard Life has a primary listing on London Stock Exchange (“LSE”) and is a constituent of FTSE 100. It is also listed in the Dow Jones Sustainability Indices (DJSI).
Aberdeen Asset Management Fast Facts:
- Founded 1983
- AUM: £302.7 billion (31st December 2016)
- HQ: Aberdeen, Scotland
Aberdeen Asset Management has a primary listing on London Stock Exchange (“LSE”) and is a constituent of FTSE 100.
Expected Deal Completion: Q3 2017
“We have always been clear that it is Standard Life’s ambition to become a world-class investment company and that this would be achieved through continued investment in diversification and growth, coupled with a sharp focus on financial discipline. We are therefore delighted that this announcement marks another important step towards achieving that ambition. The combination of our businesses will create a formidable player in the active asset management industry globally. We strongly believe that we can build on the strength of the existing Standard Life business by combining with Aberdeen to create one of the largest active investment managers in the world and deliver significant value for all of our stakeholders.”
~ Keith Skeoch, CEO of Standard Life
“We believe this merger is excellent for our clients, bringing together the strong and highly complementary investment capabilities of each firm with a breadth and depth of talent unrivalled amongst UK active managers and positioning the business to meet the evolving needs of clients and customers. This merger brings financial strength, diversity of customer base and global reach to ensure that the enlarged business can compete effectively on the global stage.”
~ Martin Gilbert, CEO of Aberdeen
“This merger brings together two fine companies and I’m greatly honoured to be asked to chair the combination. I look forward to welcoming our new colleagues. We will be successful as long as we continue to put our clients. customers, employees and good governance at the heart of what we do.”
~ Sir Gerry Grimstone, Chairman of Standard Life
“The strategic fit is compelling and creates a business with minimal client overlap and which is diversified by revenues, asset class and distribution channel. The combination will result in a material enhancement to earnings and this, coupled with a strong balance sheet, will facilitate significant investment in the business to support growth, innovation and a progressive dividend policy.”
~ Simon Troughton, Chairman of Aberdeen
Source: Official Press Release from Standard Life and Aberdeen Asset Management