As the Buyer Works on Funding, Pioneer Fights Possible Defections
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Thursday, December 08, 2016

As the Buyer Works on Funding, Pioneer Fights Possible Defections

Even as the last-bidder-standing in the Pioneer Investments [profile] auction is working on financing its bid, Pioneer itself is fighting two possible defections.

Yves Perrier
Chief Executive Officer
French asset manager Amundi plans to raise 1.5 billion to 2 billion euros ($1.6 billion to $2.15 billion) in early 2017 by issuing new stock, all to help pay for the Pioneer deal, unnamed sources tell the Financial Times. The price tag on that deal, the paper estimates, could reach 3.5 billion euros ($3.74 billion) if Pioneer's 325 million euros of cash are included. On Monday Amundi and UniCredit (the beleaguered Italian bank that's selling Pioneer), concisely confirmed that "they entered into exclusive negotiations" about the deal. [See MFWire's living timeline of the Pioneer auction for more details and history.]

Meanwhile, the Irish Times, the FT, Fund Strategy, and Financial News all report that Pioneer has informed clients that two of its key PMs in Europe have been suspended. Tanguy Le Saout, head of European fixed income, and Ali Chabaane, head of portfolio construction, have reportedly been planning to leave and create a new asset management shop.

"People are looking at what else is around. The big fear is a lot of jobs will be cut after any merger takes place," an ex-Pioneer employee tells the FT.

Indeed, the FT notes that Pioneer staff worry about "overlapping functions" with the team at Amundi. And the FT expects Amundi to "keep Pioneer on a tight leash" after the Amundi CFO promised earlier this fall to "stick to our financial discipline."

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