Resolution weighs bid for Pioneer

Resolution, a British insurance-focused takeover specialist, is considering making an offer for Pioneer, the fund management business of Italian financial group UniCredit, according to Reuters

It is unclear whether Resolution will proceed with an offer, and it has not carried out due diligence on the business. Analysts estimate Pioneer, which in June 2010 had assets under management of Eur185 billion, is worth about Eur3 billion.

Potential suitors for Pioneer, originally a Boston-based asset manager, include BNP Paribas, Amundi, co-owned by French banks Credit Agricole and Societe Generale, and Natixis, a French asset manager with extensive US interests. A spokesman for UniCredit said: “the objective remains to explore strategic partnerships and other strategic options to maximise Pioneer Investments’ overall franchise value.”

UniCredit first indicated it was considering a possible sale of Pioneer in May 2010, when it appointed Bank of America Merrill Lynch to consider all options, as part of a strategy to boost its capital strength. The Bank of Italy has also encouraged banking groups to separate their fund management operations from their distribution business.

Pioneer invested about Eur800 million in Bernie Madoff feeder funds. US lawyers investigating the nature of involvement of Pioneer and other fund managers in the Madoff scam are also looking at HVB, UniCredit’s German subsidiary. UniCredit is facing three class action lawsuits in the US.

Resolution has said it is looking for a funds business to act as an in-house asset manager for its life insurance business, which it hopes to float or sell by 2013. The company bought UK life and pensions group Friends Provident for £1.8 billion in 2009. In June 2010, Resolution paid £2.75 billion for most of Axa’s UK operations.

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