MILAN – UniCredit intends to increase the commissions it generates from the distribution of asset management products, said Tuesday the president and CEO of the Italian bank, which strives to “rebalance” the agreement signed in 2017 with its French partner Amundi.
According to the ten-year agreement reached during the sale of UniCredit Pioneer’s in-house manager to Amundi in 2017, the French group’s funds must represent a predefined share of the Italian bank’s total assets under management (AUM).
This means that UniCredit has limited room to distribute other funds, whether its own products or funds from third-party managers, on which the bank would earn higher fees.
“Amundi has the lion’s share. The situation is rebalancing a little and will rebalance in the future,” Andrea Orcel, chairman and CEO of UniCredit, explained to analysts during the presentation of the third quarter results of the bank.
Sources had indicated in May that UniCredit had reduced the proportion of Amundi funds in its AUM, but had paid penalties for not having reached the minimum threshold stipulated in the contract.
Andrea Orcel said UniCredit would maintain its current “open architecture” approach to asset management, based on partnerships between different players, including Amundi, to offer the best products in each category.
An in-house asset manager allows banks to earn full distribution fees, but technological advances and increased competition are preventing UniCredit from returning to the days when it owned Pioneer.
Since joining UniCredit in 2021, the former investment banker has worked to increase revenues from asset management in order to increase the share of net fees in the company’s overall revenues. UniCredit.
As he sought to review Amundi’s 10-year distribution deal, Andrea Orcel signed a deal with Azimut at the end of 2022, giving the Italian asset manager access to UniCredit clients.
UniCredit has also entered into a partnership with the world’s largest fund manager, BlackRock, to use its Aladdin technology platform.
“In 2021, due to the approach we had (…), we captured less than 70% of the value of asset management through distribution fees,” said Andrea Orcel.
“We are now at 70% (…) and our objective is to increase the amount we capture (…) to more than 80% within three or four years,” he added.
(Valentina Za report, French version Corentin Chappron, edited by Kate Entringer)
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