AXA, the French insurance giant, has entered exclusive negotiations with BNP Paribas to potentially sell its subsidiary AXA Investment Managers in a massive transaction that is expected to be completed in summer 2025.
BNP Paribas would pay €5.1 billion, or roughly $5.6 billion in cash, in a deal that would take BNP Paribas' assets under management to around €1.5 billion. That would bring it a step closer to peer Amundi, which has €2.150 billion, and making it among the world's largest asset managers.
This union — AXA IM has €859 million in assets under management, and BNP Paribas has €865 million — could have major consequences for the real estate market, according to analysts.
Behind AXA IM is AXA IM Alts, with 840 employees, which is a global specialist in alternative investments, with €184 billion in assets under management as of June 30. That includes over €82 billion in real estate, €90 billion in private debt and alternative credit (€25 billion of which is in commercial real estate), and €12 billion in private equity, including €4.6 billion in real estate.
BNP Paribas includes BNP Paribas REIM, with €26.1 billion of European real estate and other assets under management on behalf of institutional and private investors as of the end of 2023. The business has various entities in France, Italy, the UK, Luxembourg and Germany and has 340 employees.
"What exciting news," said Jean-Maxime Jouis, global head of investment management at BNP Paribas REIM, in a recent post on his LinkedIn page.
According to the Fund Manager Survey 2024 by Anrev, Inrev and NCREIF, total global real estate assets under management (AUM) fell to €3.7 trillion or $4 trillion in 2023, a decline of 3.8%, with an average AUM of €38.8 billion for the 96 survey respondents. Overall trending "confirms the continuing concentration of capital among the world's largest fund managers," according to the survey report.
As of Jan. 1, fund managers in the top quartile together accounted for just over 79%, or €2.9 trillion, of the world's real estate assets under management, driven by an increase in mergers and acquisitions. A case in point is the proposed deal between AXA and BNP Paribas.
The total assets under management of the top 10 managers worldwide reached €1.9 trillion in 2023, with an average AUM of €189.6 billion, up from €182.5 billion a year earlier. The top five consisted of Blackstone, Brookfield Asset Management, Prologis, Metlife Investment Management and UBS Asset Management, followed by PGIM Real Estate, ESR, Nuveen A TIAA Company, CBRE IM and AXA Investment Managers.
"By combining its strengths with those of BNP Paribas, AXA IM would become a world-class asset manager, with a stronger global presence, a broader range of services, and a shared goal of leadership in responsible investment," said Thomas Buberl, CEO of AXA, regarding the announcement of the recent entry into exclusive negotiations.
According to Europe's second-largest insurer, the overall estimated value of the transaction is €5.4 billion, representing a multiple of 15 times the 2023 operating earnings.
"AXA and BNP Paribas would also enter into a long-term strategic agreement under which BNP Paribas would provide investment management services to AXA," according to an AXA statement.