Amundi Asset Management, one of France’s largest investment firms, wants to grow its exposure to private equity by more than 40 percent over the next year.
Amundi AM’s Plateforme Actifs Réels et Alternatifs or Real Assets and Alternatives unit expects to increase its €7 billion of assets in fund commitments and direct investments to at least €10 billion by 2020, Pedro Arias, global head of alternative and real assets told Private Equity International.
“By 2020 we should go that way because the fund of funds business is gaining momentum with an increasing number of investors – from small- to mid-size LPs, to French pension funds and insurers – now entering the alternative assets market,” Arias said.
Arias noted that one of the complexities Amundi PARA faces is that its size does not reflect the maturity of its business.
“We are still in the learning curve and building the business, but we are learning quickly. Most of our clients in alternatives are also our clients in bonds and equities, which makes it touchy because we can’t take too much risk and don’t do sophisticated strategies,” he said.
Amundi PARA is part of the €1.5 trillion Amundi Group. the firm has been investing in private equity since the 1990s and the dedicated asset management arm, which has €43 billion of assets, was brought together in 2016 into one platform covering private equity, real estate, private debt and infrastructure financing.
It has about €6.2 billion in its multi-management fund of funds business and €827 million in direct investments to date, according to Arias.
In order to scale the business next year, the firm wants to raise more capital from external LPs and potentially make strategic acquisitions in boutique investment firms, Arias said. It is also looking to increase separately managed accounts with its clients, as most of its clients have a much better and sophisticated understanding of their own portfolio allocations.
It has backed funds managed by Toulouse-headquartered iXO Private Equity, Paris-based Citizen Capital and European manger InvestIndustrial, according to PEI data. It also invests in large buyouts with a focus on technology. Meanwhile for its direct investments, the firm has predominantly picked up minority stakes in family-owned mid-size companies in France, Italy and Spain.
The firm is raising €500 million for its second Megatrends fund which will target businesses focusing in “mega-trends” such as demographics, environment, globalisation, technology and social changes. Its €330 million predecessor is almost fully deployed, Arias noted.