AXA Group has released its results for the first half of 2017. Its asset management revenues have amounted to €300m between January and June.
AXA IM and AB’s accumulated inflows have totalled €5bn, mostly drawn from the retail network. However, if AB has recorded €4bn in net new money over the first semester of the year, AXA IM has faced €4bn net outflows from its Asian joint ventures.
“The decline in net new money (NNM) inflows from AXA IM’s joint ventures was expected and was driven in part by a number of products reaching maturity and not being replaced due to new regulatory requirements relating to our Chinese joint-venture,” AXA commented.
“Specifically capital requirements have increased and deposits have therefore decreased as a strategic decision. It is worth nothing that this is a low margin business so the outflows have had a very limited financial impact,” the group added.
When excluding joint ventures, AXA IM’s net inflows remain positive (+€1bn) for the first half of the year, with strong momentum from third party clients.
AXA recalled that Asia Pacific remains a key market for its main asset management arm AXA IM.
“Our joint ventures in Shanghai, Seoul and Mumbai are a key part of this, but in Korea we are also addressing the local market directly. AXA IM has hired sales people in charge of promoting its products to the Korean market, and has opened an office in Korea. In China, AXA IM has obtained a WFOE from the Chinese authorities which allows AXA IM to independently run a business in China, and we will leverage our strong relationship with the SPDB Group – co shareholder of our joint venture, in this perspective.”
AXA’s assets under management have slumped to €1.19trn as of 30 June 2017 from €1.20trn as at 31 December 2016. AXA explained this was mainly driven by an adverse Forex impact at both AB and AXA IM, due to strengthening of the euro against the other major currencies, partly offset by positive market effects.
In detail, AXA IM has €735bn of assets under management (against €717bn as of end December 2016) and AB manages €460m in assets (against €486m as of end December 2016).
On a year-on-year basis, AXA’s average assets under management (excluding Asian joint ventures flows) are up 5%, supported by positive market developments and net inflows in the second half of 2016 while average inflows were up 6% yoy.