Italy's Assicurazioni Generali is in talks to buy France's Sycomore Asset Management to boost its offering of environmental and socially responsible funds, according to people with knowledge of the matter.
Generali and Sycomore, which has €8 billion ($9.1 billion) under management, may announce the deal as soon as next month, the people said, declining to be identified because talks are private. The transaction may value Sycomore at more than €200 million, one of the people said. Talks are ongoing and other bidders remain interested, according to the people.
"The deal would fit with Generali's strategy of increasing profit from asset management by acquiring small boutiques," said Nicola Maino, a fund manager at Swiss investment firm Carthesio. "If valuations are confirmed, it would be a good transaction for Generali, particularly as more than 60% of Sycomore assets are invested in the more lucrative equity sector," as opposed to fixed income.
Sycomore, created in 2001, has attracted interest from potential buyers including private-equity firm Eurazeo in recent months after co-founder and CEO Laurent Deltour stepped down in April, the people said. The firm is majority owned by its founding partners and employees.
Generali declined to comment, while no one at Sycomore was immediately available to comment.
Scale has become ever more important for money managers as fees come under pressure and competition intensifies for investor dollars. Mergers and acquisitions are a quicker route to add assets in a business where it can take years to build a client following.
Generali is seeking to generate at least €150 million of additional annual profit in 2020 from its money management operations under the oversight of Tim Ryan, who became chief investment officer last year. Generali's investing business has more than €455 billion under management.
"We will build an attractive multiboutique platform bringing together existing and new, highly specialized investment skills," Mr. Ryan said in May 2017 when Generali presented a new strategy for its asset management operations.
