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Mega asset manager Amundi lifts 2020 profit expectations, but shares slide

One of Europe's largest asset managers, Paris-headquart..

One of Europe's largest asset managers, Paris-headquartered Amundi, has lifted its 2020 targets this morning, though not as much as analysts were hoping.

The firm said in an update this morning that all targets announced at the time it floated in 2015 have been surpassed.

It added that it would lift its expectations for the 2018 to 2020 period, with net inflows now hoped to be above €150bn, the cost-to-income ratio below 53 per cent, and an adjusted net income of more than €1.05bn in 2020.

Read more: Amundi is raising a €150m private debt fund whose investments are backed by Parma ham and Parmesan

Analysts at Barclays said the financial targets were "not as ambitious as we had hoped and mostly already baked into our estimates, but we think still enough to be positive, with intent shown to accelerate growth in 2018 to 2020 versus 2015 to 2017".

Amundi's heightened growth expectations follow its €3.5bn acquisition of Pioneer Investments, the asset management arm of Italian bank Unicredit. Today the company said the integration was on track to produce cost synergies.

The firm managed to reach €1.43 trillion in assets under management by the end of 2017, though Barclays said outflows from institutional clients meant net inflows were slightly lower than expected in the fourth quarter of 2017.

Read more: Europe's largest asset manager Amundi reveals net outflows in the second quarter

UBS analysts noted that excluding joint ventures, inflows in the fourth quarter only reached €7.1bn – way below the €17bn consensus figure.

Yet they added that revenues of €751m, up 12 per cent year-on-year, were well above consensus driven by performance fees and management fees.

"These good results confirm the strength of Amundi’s business model, which has been further boosted by the integration of Pioneer in three key areas: distribution capacity, expertise and talent," said chief executive Yves Perrier.

"In this context, the new targets for 2018 to 2020 provide for acceleration in growth and profitability, with in particular a two-fold increase in net income in relation to the level seen at the time of Amundi’s listing.”

Despite the generally positive outlook, Amundi's share price slumped by more than five per cent.

Read more: Unicredit to finalise terms with Amundi over €3.5bn deal to buy Pioneer

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