BNP Paribas Asset Management expects its alternatives division to grow by 5 to 6 percent annually and to consolidate its leading position in Europe. The asset manager said it is barely affected by the negative sentiment surrounding private credit.
Lars Machenil, the Belgian chief financial officer of BNP Paribas, and other senior executives of the French group provided further details on Tuesday afternoon in a video conference about BNP Paribas AM’s ambition to increase assets under management by 350 billion euro by 2030. Assets under management, following the recent acquisition of AXA IM, amount to 1,624 billion euro. The goal is therefore to reach close to 2,000 billion euro within five years.
To clarify: BNP’s modeling assumes 0 percent impact from market developments in achieving the 350 billion euro growth target. “History shows that this is likely an underestimate,” Machenil said.
Three growth drivers
The largest segment, active management and ETFs, has significantly increased its scale thanks to AXA IM’s strong contribution in fixed income and currently manages 1,150 billion euro in assets. The ambition is to grow this further to 1,335 billion euro by 2030. That implies 185 billion euro in net new money, or a growth rate of 3 percent per year. BNP Paribas AM expects inflows both from the parent group’s retail and wealth management divisions and from institutional clients and insurers.
The asset manager expects an even faster growth rate, 5 to 6 percent per year, in alternatives. This should result in net inflows of 85 billion euro by 2030, bringing the total to 385 billion euro. The category includes private equity, private credit, private debt, real estate, and infrastructure.
Isabelle Scemama, head of alternatives, called these investments “the most promising segment for market growth,” referring to the “democratization” among retail and wealth clients and the increased openness among institutional investors toward the illiquidity of alternatives. She previously led the same division at AXA IM, which had made alternative investments its specialty.
“We see more investors considering European alternative investments as an option to bring more balance to their portfolios, and this is reinforced by geopolitical tensions”
Isabelle Scemama, head of alternatives BNP Paribas Asset Management
With 300 billion euro in alternatives under management, the vast majority contributed by AXA IM, BNP Paribas AM can finally compete with the major players in the segment, although the gap with the US giants remains large. CEO Sandro Pierri said that “BNP Paribas AM is now the European number one in alternatives, in a sector dominated by US players.”
“Our strong European footprint is a competitive advantage,” said Scemama. “We see more investors considering Europe as an attractive alternative to bring more balance to their portfolios, and this is further reinforced by current geopolitical tensions.”
The French group said it is barely affected by the current negative sentiment around private credit and the much-discussed US BDC vehicles. “This is mainly a US issue,” noted Renaud Dumora, deputy chief operating officer at BNP Paribas. “Our offering in the private and alternative credit market is very broad and we see strong appetite from investors—particularly institutional ones—for this asset class, as it allows them to diversify.”
BNP Paribas AM provided few details about the third growth driver: joint ventures. These activities are expected to generate 80 billion euro in new money over five years, implying a growth rate of 8 percent per year. Machenil clarified that these mainly involve partnerships with local players in Asia, including China, South Korea, and India.
Chart: ambitions for net new money inflows BNP Paribas AM
Fund merger
Notably, BNP Paribas AM aims to achieve growth in assets under management without increasing operational costs. The cost-income ratio, a key efficiency metric, is expected to decline from 71 percent today to below 60 percent within five years.
According to BNP Paribas executives, the integration of AXA IM is fully on track. The legal mergers have been completed and client communication has been unified. This is also evident at industry conferences, such as Asset Management Tomorrow in Brussels (see photo above). There is no longer any trace of AXA’s distinctive blue; all sales and marketing have recently switched entirely to BNP’s green brand color.
The most difficult operational challenge this year will likely be eliminating overlapping roles. Dumora reiterated on Tuesday that this will result in 1,200 job cuts worldwide, including 600 in France. Social negotiations are ongoing there.
The merger of the fund ranges is expected to be fully completed by mid-2027, with IT integration to follow a few months later.
Chart: integration of AXA IM into BNP Paribas AM
