Generali and BPCE lay the foundations for an asset management giant

Italian insurer Generali and French insurer BPCE signed a memorandum of understanding on Tuesday to combine their asset management operations, a first step towards creating Europe's largest player in the sector by revenue, Reuters reported.

The two parties' managements approved the non-binding agreement that envisages the creation of a joint venture to manage assets worth 1.9 trillion euros ($2 trillion). The new entity's revenues are estimated at 4.1 billion euros. The transaction is expected to be completed by early 2026.

The agreement comes at a time when Europe's asset management industry is facing shrinking profit margins, competition from US giants and rapid technological developments. Some sources quoted by Reuters expect financial services activity to recover in 2025 after BNP Paribas agreed last year to buy the asset management division of insurer AXA. European leader Amundi also discussed a deal with Allianz Global Investors, but the talks failed.

"The asset management industry is changing rapidly," BPCE Chief Executive Nicolas Namias said at a joint news conference with Generali CEO Philippe Donnet, presenting the "very ambitious" project.

Under the memorandum of understanding, BPCE subsidiary Natixis Investment Managers and Generali Investments would each own 50% of the combined entity, with "balanced governance and control rights." Natixis managed assets of 1,280 billion euros as of September 30, 2024, while Generali had assets under management of 843 billion euros.

The Generali-BPCE transaction must receive regulatory approval. Rothschild and Fenchurch advised BPCE on the deal, while Ardea Partners, Citi, Mediobanca and Zaoui & Co. advised Generali.