GREENWICH, Conn.--(BUSINESS WIRE)--AXA Investment Managers (AXA IM), a global multi-expert asset management company, today reported financial results for the full year ended December 31, 2013. AXA IM continued to demonstrate strong growth, reflecting momentum across all asset classes, particularly in fixed income and fundamental equity (AXA Framlington). AXA IM’s assets under management (AUM) at the end of December 2013 were $726 billion, up from $706 billion at the end of 2012(1).
Andrea Rossi, CEO of AXA IM, commented on the results: “Despite a challenging macro environment, 2013 was another successful year for AXA IM and our results demonstrate that we are on the right path to continue to strengthen our position as a reference asset management firm for investors around the world. We will build on the very strong inflows achieved in 2013 to accelerate the next phase of development for AXA IM.”
“AXA IM gains a strong competitive advantage from the distinctive, value-creating relationship we have with the AXA Group. As our parent and largest client, the work we do in partnership with AXA Group helps us stay at the forefront of financial innovation and enables us to understand the needs of complex clients and develop tailor-made solutions. It has allowed us to build a strong offering across all asset classes as well as expertise in combining them. This relationship allows us to develop market-leading solutions for the AXA Group which we can then, in time, extend to third party clients. Examples of this approach include: commercial real estate debt, SmartBeta Equity and Credit and our work in the structured finance space such as insurance-linked securities and loans.”
AXA IM’s AUM at the end of December 2013 were $726 billion, up 3 percent, or $19.2 billion, compared to the end of December 2012. This increase in assets came from strong positive net new money inflows of $16.2 billion(2) and $10.6 billion combined market and foreign exchange rate impact, partly offset by negative $5 billion change in scope impact(3).
2013 saw continued growth in net new money (NNM) for AXA IM with $16 billion, up from $4 billion in 2012 and negative $1.3 billion in 2011(4). The largest contributors to this were Fixed Income ($8 billion) and Equity ($2.9 billion), of which $2.1 billion was contributed by the fundamental equity business AXA Framlington and $0.8 billion by the quantitative equity business AXA Rosenberg.
Revenues were $1,367 million, up 7 percent compared with last year, due to increased management fees as a result of a rise in assets and an improved product mix, an increase in performance fees driven mainly by the Structured Finance division and an increase in transaction fees generated by the Real Estate business. AXA IM increased its operating income by 11 percent, generating underlying earnings of $228.2 million, up 5 percent compared with 2012.
While AXA IM did not see the much talked of ‘great rotation’ out of fixed income into equities in 2013, the Company did see changes within fixed income with clients reducing portfolio duration, adding inflation protection and seeking additional yield. This trend was reflected by robust NNM inflows into short duration, investment grade credit strategies and high yield credit. AXA IM’s Fixed Income team now manages over $26 billion in short duration strategies reflecting clients’ desire for strategies with a lower sensitivity to interest rate movements. Investors also showed greater appetite to consider alternatives to fixed income which was reflected by strong NNM into commercial real estate ($2.7 billion).
With respect to equities, AXA IM’s fundamental equity expertise, AXA Framlington, saw the continued diversification of its client base. 2013 also demonstrated the continued return to growth of AXA Rosenberg, AXA IM’s quantitative equity division, with NNM inflows of $0.8 billion, with particular success in SmartBeta Equity.
These inflows allowed AXA IM to continue strengthening its European footprint, particularly in Continental Europe, while laying the foundation for increased future international development. AXA IM has seen growth in assets in Asia, notably through its joint venture in China (with Shanghai Pudong Development Bank) and the Americas (United States and Latin America).
The end of quantitative easing in the United States marks a major milestone on the road back to a world of conventional monetary policy and markets driven by fundamentals. AXA IM believes that the transition period may reach into the next decade and that investors must be prepared to take a long-term view.
“While we are pleased with our 2013 market share growth in many areas, our ambition is to be a truly global asset manager,” continued Rossi. “As we continue to leverage our leading position in Europe, we will strengthen our geographical footprint in 2014 with increased investment in regions where we are less visible today such as the Americas, Nordics and Asia including Japan. We believe that our strong results of 2013 provide the perfect springboard for us to not only continue, but accelerate our growth in 2014.
“In order to further support and foster this momentum, we are working at further improving our client experience. As a first step, we evolved our structure in early March with the creation of the Client Group, bringing together all of the teams focused on sales activities aimed at our third-party customer base. This new group of 250 professionals is led by Laurent Seyer, Global Head of the Client Group. The division is in charge of developing AXA IM’s offer by client segment (institutional, retail and wholesale), while coordinating and monitoring our marketing and client relationship activities. We believe this development, combined with our strong investment performance, broadly diversified offering and the strengthening of our local footprint, will further enhance our relationship with our clients and increase AXA IM’s visibility.”
Tim Gardener, formerly Global Head of Consultant Relations, leads the institutional segment of the Client Group and Bettina Ducat, formerly Head of Sales for France, Southern Europe, Latin America and Middle East, heads up the retail and wholesale segment. Both report to Laurent Seyer, Global Head of Client Group.
Notes to editors
(1) In order to provide a consistent analysis following the sale of AXA Private Equity (AXA PE) on September 30, 2013, all figures are based on restated figures excluding AXA PE’s contribution in both 2012 and 2013 with the exception of the total net new money figure.
(2) Net new money of $16.2 billion includes AXA PE’s contribution up to September 2013. Net New Money inflows in 2013 excluding AXA PE were $13.9 billion.
(3) The negative change in scope impact mainly related to the partial sale of the UK Life & Savings operations and to the sale of Private Client activity.
(4) These net new money figures include AXA PE. The net new money total for 2013 includes AXA PE’s contribution up to September 2013.
All figures are as at end of December 2013 unless otherwise stated.
Our latest edition of Investment Acumen which focuses on the post-QE world can be found here.
To watch a video of Andrea Rossi discussing AXA IM’s 2013 results please click here.
About AXA Investment Managers
AXA Investment Managers is a multi-expert asset management company within the AXA Group, a global leader in financial protection and wealth management. AXA IM is one of the largest European-based asset managers with approximately $726 billion in assets under management as of the end of December 2013. AXA IM employs over 2,100 people around the world and operates out of 22 countries.
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