Amundi’s new CEO has road map laid out as she takes on BlackRock

As Valerie Baudson takes charge today as chief executive officer of Amundi, Europe's biggest money manager, she says pressure on margins from low interest rates, intensifying competition from rivals like BlackRock and the development of passive management will be among her biggest challenges.

Add to that an expansion in Asia and rising ambitions for ESG investments, and the 50-year-old has her plate full. Ms Baudson has taken over a firm with about €1.76 trillion ($2.14 trillion) under management from Yves Perrier, who's now chairman.

"We will consolidate our leadership in Europe and amplify our development in Asia," Ms. Baudson said in a written response to questions.

With her ascension, Ms. Baudson has become the top-ranking woman in European money management. Her rise coincides with the emergence of the turbo-charged exchange-traded fund sector — which she expects will grow at an annual 12% clip over the next five years — as a game changer for the continent's industry. It's a sector she knows better than anyone at Amundi, having helped build the business that is now hauling in mountains of investor money — total assets held across Europe's ETFs reached €1 trillion for the first time in 2020, according to data from Morningstar.

"Her background in ETFs and thematic investing areas, where the group is looking to expand, made her an obvious internal candidate," said Michael Sanderson, head of European diversified financials research at Barclays.

Only the second CEO since the creation of Amundi through the merger of the asset management units of Credit Agricole and Societe General in 2010, Ms. Baudson has made clear she will not so much be designing a new strategy as delivering on the ambitious objectives set by Mr. Perrier.

Last month, Amundi reported its highest quarterly profit since the firm's trading debut in 2015 as rising equity markets fueled an increase in fees.

On Mr. Perrier's watch, Amundi more than doubled its assets under management as he executed some high-profile acquisitions, buying Pioneer Global Asset Management from Unicredit in 2016 and Banco de Sabadell's money management subsidiary in 2020. In April, he entered into exclusive negotiations with Societe Generale to acquire its Lyxor unit — a €173-billion fund manager — in a deal that will make Amundi Europe's second-biggest provider of passive funds behind BlackRock.

"Baudson is dealt a good hand, as Amundi has a positive track record," said Sarah Jane Mahmud, senior analyst at Bloomberg Intelligence. "In comparison, Standard Life Aberdeen's Stephen Bird, who took on the CEO role last September, joined a firm that faced more challenges, with decreasing assets under management and consistent outflows."

Among early tasks as CEO for Ms. Baudson — who created Amundi's passive investment unit from scratch in 2008 — will be to complete the Lyxor acquisition and integrate it. The €825 million deal, for which completion is set for February 2022, will help Amundi leapfrog rivals such as Deutsche Bank's DWS and UBS in passive products, with €142 billion in such assets.

Another key priority will be to intensify Amundi's push in Asia, with a goal to reach €500 billion in assets in the region by 2025. In December 2019, Amundi created a joint-venture with Bank of China, becoming the first foreign company to own a majority stake in a Chinese asset management firm. The unit started operations in October.

Yet another well-defined target for the new CEO is to generate €150 million in revenue from Amundi Technology in the next five years. The company is following in the footsteps of BlackRock and others who have turned software services into a lucrative side business. In 2020, BlackRock, the world's largest asset manager, earned more than $1 billion in technology services revenue, a category that includes sales of its Aladdin software.

"Amundi has given clear targets for its technology platform and its push in Asia, so Baudson will be judged on those," Mr. Sanderson said.

A graduate of France's elite business school HEC and a brokerage executive turned asset manager, Ms. Baudson is a veteran of Credit Agricole, which still owns a majority stake in Amundi. She has spent 14 years at Amundi.

"Baudson's appointment is a pretty big deal for female representation as there is a huge lack of diversity in asset management," said BI's Ms. Mahmud.

The new CEO's advice to women who want to make it in finance: "Don't hesitate to dare, to manifest your ambition."