France’s asset management industry could see consolidation
France’s asset management industry is set for consolidation in the coming months and years as the major providers decide which client sector they will target, according to Anne-Laure Frischlander, managing director and head of The Bank of New York Mellon Asset Management’s French operations.
The industry, the second largest in Europe, has been doing relatively well as institutional and retail investors seek to boost provision for retirement.But French banks, some recently downgraded by global credit rating agencies, are now under pressure to improve their balance sheets, and may be considering selling off non-core businesses, including asset managers.
“Expect consolidation,” says Frischlander. “These banks need to sell their asset managers to gain capital required under a whole lot of new regulations introduced in Europe in recent months, and more to come.”
If most local banks are in the same position, who is likely to buy those up for sale? “Foreigners may take up some opportunities,” she says, adding that The Bank of New York Mellon is not actively looking for acquisitions, but could consider a deal if it was the right one.
It is notoriously difficult for foreign asset managers to penetrate the French market, where local banks have held tightly to client access via the traditional banc assurancedistribution model. Several large foreign banks have tackled France over the years, but then retreated after failing to make sufficient impact.
Says Frischlander: “There have been some bad examples of foreign firms coming to France and making a lot of noise, and then pulling out. But others, like Blackrock, State Street and Templeton, have done it the right way and succeeded.”