EUROPE – FinEx Capital has made an undisclosed offer to acquire 100% of Dexia Asset Management, the subsidiary of Franco-Belgian banking group Dexia SA.
FinEx Capital offers a range of investment solutions, including hedge funds, private equity and ETFs.
Its parent company, FinEx Group, has more than $1bn (€750m) in AUM, offering both passive and active management.
Simon Luhr, managing partner and chief executive at FinEx Capital Management, said the company had been looking to acquire an asset manager “for some time”, in order to add scale to its existing platform before expanding into Asia.
“We have been following the Dexia situation for some time and have decided to enter an offer to acquire [it],” he said.
“The business offers us a platform that is the right size and product mix for us, and it will allow us to continue to grow our business.”
Dexia has had a particularly difficult time of offloading its asset management division since Belgium, France and Luxembourg agreed to bail out the bank for the second time in 2011.
In 2008, these governments stepped in with €150bn of guarantees to consolidate Dexia after it ran into financing difficulties.
The countries then provided an additional €90bn in 2011, with 60.5% being provided by Belgium, 36.5% by France and 3% by Luxembourg.
Shortly after the bailout, Dexia began the lengthy process of offloading its constituent businesses, as agreed with the European Commission.
The sale of Dexia AM, which has approximately €80bn in AUM worldwide, was meant to be the “final stage” in a “dismantling programme” adopted more than two years ago.
At the end of July, a negotiation process “full of requests” that began in December 2012 with Hong Kong-based private equity firm GCS Capital finally broke down.
When talks with Dexia first began, Huan Guocang, chief executive at GCS, said Dexia AM presented a “rare opportunity” to acquire a “well-capitalised, standalone asset management business with the potential to transition into a global franchise”.
But even in June 2012, an M&A expert argued that Dexia AM had been put up for sale at “the wrong time”, as a number of European banks had been looking to offload their asset management businesses at the same time.
Ray Soudah, founder of MilleniumAssociates, told IPE that Dexia should have waited for the market to recover.
“There is only one reason why European banks such as Dexia are obliged to sell their asset management arms, and this is due to the rescue packages they received from their governments during the financial crisis,” he said.
According to Soudah, the sale of Dexia AM would have been little help to the group’s business, given that valuations were so low.
“It would be much more of a symbolic sale than a material one,” he said.