French bank Natixis is looking to buy more majority stakes in boutique mergers and acquisitions advisers and asset managers as part of an effort to create a global financial services network, its new chief executive says.
François Riahi told the Financial Times in New York that while his bank lacked the capacity to win mandates for large, cross-border M&A deals, it saw its asset-light “multi-boutique” strategy — laid down by his predecessor, Laurent Mignon — as a strength.
In March, Natixis bought stakes in three M&A boutiques in the UK, China and France. Last month, it sold a number of businesses to parent BPCE in a €2.7bn ($3.1bn) deal to help fund acquisitions. Natixis now had its eye on Asian boutiques, Mr Riahi said.
“M&A is booming, and not slowing down . . . but the multi-boutique model works through the cycle because it delegates responsibility for taking on costs — hiring — to the businesses that are close to the client,” he said.
Mr Riahi said he was also interested in investing in managers who specialise in private debt despite a rush by investors into that asset class. “Of course the market is hot, so we are cautious, but we don’t have enough product for our clients,” he added.
Another focus for Natixis is on asset managers who specialise in infrastructure assets in the US and Europe. In the payments business, Natixis is trying to move outside of its home market. The chief executive said: “We are 75 per cent France now — we want to be 50 per cent France by 2020.”
Mr Riahi was chosen as chief executive in April after Mr Mignon left to head BPCE. Mr Mignon was credited with turning round Natixis after he joined in 2009 and investors had wondered if his departure would result in changes to the bank’s direction.
Mr Riahi, who has been at BPCE since 2009 in roles including co-head of investment banking, was quick to reassure on that point.
“The CEO of BPCE left and our Laurent Mignon went to lead the group. I had worked closely with him and . . . I was chosen by him because I can continue the strategy he started,” Mr Riahi said. “I was fully involved in the strategy plan he has led — he gets the credit, he made the decisions, but I was involved throughout.”
In November, Natixis set out a new strategic plan that looked to take advantage of the strides it has made restructuring its business since the financial crisis. The bank set tougher profitability targets, aiming to lift its return on tangible equity to between 13 per cent and 14.5 per cent by 2020.
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