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BNP Paribas (BNPQY) in Talks to Form Asset Management JV With Axa

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BNP Paribas SA (BNPQY - Free Report) and Axa are in talks to merge their asset management businesses to create a joint venture (JV) worth €1.4 trillion ($1.5 trillion) in assets under management (AUM). The JV, if formed, will become one of the largest firms in Europe in terms of AUM. The news was first reported by Bloomberg, citing people with knowledge of the matter, who asked not to be identified because the talks are private.

Per the people familiar with the matter, the talks to merge Axa Investment Managers and BNP Paribas Asset Management are ongoing and there’s nothing certain about a transaction yet.

Representatives of Axa and BNP Paribas did not make any comment on the matter.

Axa’s asset management business manages its premium income, which is mainly invested in the fixed-income market. In an effort to become less sensitive to market risks, the insurer’s CEO, Thomas Buberl, shifted the firm’s focus from life insurance to property and casualty and health insurance.

Axa’s decision to merge its asset management unit comes as the insurer looks at the prospects of this business.

BNPQY is exploring options in an effort to diversify its income stream. After the sale of its U.S. retail business, BNP Paribas is particularly interested in merger deals to deploy some of the excess cash accumulated from the sale.

Currently, BNPQY carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of late, consolidation within the asset management industry has increased. The private markets sector is particularly witnessing an acceleration in mergers.

Currently, private markets represent the fastest-growing segment in asset management, with alternative assets anticipated to hit $40 trillion by the decade’s end. As institutional and wealth investors increasingly allocate funds to alternatives, there is a rising demand for standardized data, benchmarks and analytics.

These tools are essential for effectively incorporating private asset classes into portfolios and optimizing fund manager performance. Thus, various asset managers across the globe are seeking strategic merger options.

In January 2024, BlackRock (BLK - Free Report) agreed to acquire Global Infrastructure Partners for $12.5 billion, which should significantly expand its offerings beyond traditional stocks and bonds.

BlackRock has been actively pursuing other global and domestic expansion opportunities. In May 2024, BLK acquired the remaining 75% stake in SpiderRock, which is expected to enhance its separately managed accounts offerings.

Blue Owl Capital Inc. (OWL - Free Report) has completed the acquisition of Prima Capital Advisors from funds managed by Stone Point Capital LLC. The move aims to boost the company’s presence in the real estate market and further diversify its offerings on the platform.

The deal, announced in April 2024, also led to the formation of Blue Owl’s Real Estate Finance strategy. Per the terms of the transaction, the company paid roughly $157 million in equity and $13 million in cash. An additional earnout of up to $35 million will be paid in the form of equity upon the fulfillment of certain targets. Prima’s employees will join OWL.


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