Dexia has chosen 'wrong time' to sell asset management business
GLOBAL - Dexia Asset Management has been put up for sale at "the wrong time", as a number of European banks scramble to offload asset managers of their own, an M&A adviser has claimed.
A number of European banks are reportedly looking to offload their asset management businesses, including Robeco, Santander, and a number of French banks.
At a time when Dexia Group is reportedly in talks with three international parties over the sale of its asset management business, Ray Soudah, founder of MilleniumAssociates, told IPE that the Franco-Belgian group would do well to wait 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.
"They are now obliged to produce a list of disposals. But asset management businesses are among the best subsidiaries European banks can rely on at the moment."
According to Soudah, the sale of Dexia Asset Management would be of little help the group's business, given that valuations are so low.
"It would be much more of a symbolic sale than a material one," he said. "Dexia's asset management arm has a long-term value given its low capital-intensive nature."
Soudah also believes Dexia could face some difficulty selling its asset management division to a US-based company.
"It is unlikely for the bank to complete with US firms, as the US business model do not fit with a multiple asset manager such as Dexia," he said.
"That is precisely the reason why US firms did not manage to acquire Deutsche Bank Asset Management.
"Having said that, US firms remain the largest players in terms of capital and are particularly interested in acquiring such businesses at a low price."
Dexia's press office was unavailable for comment. In a recent statement, however, the group confirmed it had entered final negotiations with three undisclosed parties.
It said: "Having finalised the sale of Dexia Bank Belgium (now Belfius Bank & Insurance), signed the sales of RBC Dexia, Bank International in Luxembourg and DenizBank, started up a process enabling the takeover of the historical French local public sector financing activities of Dexia Crédit Local, the conclusion of the negotiations with a view to selling Dexia Asset Management will constitute the final stage in the dismantling programme adopted on 9 October 2011."
According to data from IPE's Top 400 Asset Managers 2012, Dexia Asset Management runs more than €77.9bn in assets worldwide, as at 31 December 2011.