Amundi’s ETF chief on building a scale business
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Three framed pictures occupy pride of place in the sleek Paris office of Amundi’s Valérie Baudson.
One shows the team of colleagues she leads in the exchange traded fund unit she built from scratch at the French asset manager. Another features CPR, Amundi’s thematic investing division, of which she is chief executive. And the final picture is of Ms Baudson alongside her fellow Amundi management committee members.
The triptych is a visual representation of Ms Baudson’s manifold responsibilities. How does one person carry out three jobs at the same time? “Very naturally,” she tells me over a video call with her characteristic poise.
Ms Baudson’s multiple titles at Amundi — she has recently taken on a fourth, head of third-party distributors and wealth — are partly a quirk of the €1.7tn asset manager’s structure. All the senior executives supporting chief executive Yves Perrier are responsible for several business lines.
But they are also testament to the drive that has helped her rise to the highest echelons of Europe’s largest asset manager since joining 13 years ago.
Brought in to launch Amundi’s ETF business, she now oversees a €140bn-in-assets unit spanning conventional tracker funds and ETFs, and smart beta funds that track indices tilted to one or more factors.
Her promotion to deputy chief executive in 2016 means she is regarded as a potential candidate to one day lead Amundi. Mr Perrier, 65, has not indicated when he will step back but speculation is rife over who will replace the longstanding chief.
As a life-long careerist with the Crédit Agricole group, the French bank that is Amundi’s majority shareholder, Ms Baudson understands the demands of internal politics and shows restraint when asked about her ambitions. “All that I can say is that I’m totally focused on my current roles, which are extremely interesting and demanding,” she says with a smile.
Assets under management €1.65tn
Ownership Crédit Agricole has 70 per cent stake, with a free float of close to 30 per cent
Dressed in a Chanel-style bouclé jacket, the 49-year-old exudes self-confidence and speaks in a direct, matter-of-fact manner. But she is also a careful diplomat — a close colleague describes her style as “an iron fist in a velvet glove” — and an expert at toeing the corporate line.
She is tight-lipped about whether Amundi is preparing to do a deal to grow its ETF business. Media reports in November suggested it is one of the bidders for domestic rival Lyxor, owned by Société Générale, one of the founding shareholders of Amundi.
“The Amundi ETF business was pure organic growth starting from zero and we maintain this objective,” she says. “But if there are [external] opportunities, obviously we will look at them. There is more room for consolidation in the ETF industry and in asset management as a whole.”
An acquisition of Lyxor, a predominantly passive player with €157bn in assets, would propel Amundi into the position of Europe’s second-largest ETF provider, making it better placed to compete with US passive juggernaut BlackRock. With $72.8bn in ETF assets, Amundi lags far behind BlackRock, which has $532bn in Europe alone, according to ETFGI.
The rumours come as the ferocious fee war among passive funds is straining margins, making scale essential for managers to compete. Ms Baudson knows this well. She joined Amundi just before Mr Perrier set about transforming it into the region’s largest fund group through a series of deals, the most recent of which was the 2016 acquisition of UniCredit’s Pioneer.
Reflecting on the rationale for the dealmaking, she observes that the seismic changes that would reshape asset management were already on the horizon in 2007. “We knew that the industry was increasingly going in two directions, with very large actors that are willing to provide all types of solutions and benefit from scale [such as Amundi] on one side, and smaller boutiques on the other side.”
While this, and the emergence of ETFs, were enough to convince Ms Baudson to swap investment banking for asset management, her switch surprised some at the time. “I left a very nice corner office [at broker Cheuvreux, then part of Crédit Agricole],” she laughs. “Everyone found my choice completely crazy — but I was really looking for a challenge and it [turned out to be] the best decision of my career.”
Valérie Baudson’s CV
Born 1971 Paris
1992-1995 MA, Finance, HEC Paris
Total pay Not disclosed
1995-99 International audit manager, Banque Indosuez
2000-07 Various roles including head of marketing, Cheuvreux
2008-present Chief executive of ETF business, Amundi
2016-present Member of general management and executive committee; CEO of CPR AM, Amundi
One former colleague says that Ms Baudson’s lack of previous asset management experience worked to her advantage, with her business-minded attitude gelling particularly well with Mr Perrier’s approach.
The coronavirus crisis has blunted Amundi’s ETF sales this year. While most European ETF providers have been hit, the slowdown has been more pronounced for Amundi, with year-to-date sales down 32.5 per cent year on year compared with 11.7 per cent for the rest of the sector, according to ETFGI.
Ms Baudson blames the weak numbers on several large one-off redemptions due to big investors moving into less risky assets. She is optimistic that Amundi can meet its objective of achieving €200bn in passive assets by 2023 thanks to its expertise in sustainable investment — an increasingly popular area for ETF investors.
Amundi is developing a climate ETF that will track a benchmark that is aligned with the goals of the Paris agreement. “We believe it’s a misconception that ESG criteria cannot be taken into account in ETFs.”
Sustainable investment is something of a pet project for Ms Baudson, who, outside of her work at Amundi, is leading work within French finance lobby Paris Europlace to make it easier for investors to select stocks using ESG criteria.
She strongly believes Europe needs a classification system for what constitutes a good or bad social investment, an expansion of the EU’s green taxonomy. This is particularly important given the spotlight cast on social inequalities by the pandemic, she says. “A company can’t perform well in the long term if it doesn’t take care of its social footprint.”
The Europlace committee led by Ms Baudson is also pushing for Europe to develop a centralised database of companies’ ESG information in order to reduce investors’ reliance on ESG rating providers, many of whom are based in the US. “It’s extremely important that Europe keeps its sovereignty when it comes to extra-financial data.”
But Ms Baudson is an internationalist at heart. She talks fondly about her time travelling the world as an international audit manager for Banque Indosuez earlier in her career. Another picture in her office shows her alongside former US secretary of state John Kerry, who she met at an Amundi event last year.
A mother of two, she balances home life with a demanding career in international finance. But her advice for women breaking into asset management is to be bold. “I always advise them to express their ambition and take risks,” she says. “They hold the same cards as their male colleagues and should dare to use them.”