Present decisions. The French Association of Financial Management (AFG) celebrated its 60th anniversary last September, reminding us of the main stages.
Eric Pinon. Today, asset management is recognized as a profession in its own right, not a banking or insurance department, with true leadership in France. We are also seen as providers of savings solutions and not just as manufacturers of products. The last sixty years have been marked by two dates: 1989, when the status of portfolio management company (SGP) was created. Then, in 1996, with the law of modernization of the financial activity, that turned into subsidiary the activity of management of banks and insurance companies. We find these three origins among our partners: subsidiaries of banks or insurance groups, and entrepreneurial structures.
“Asset management is a key player in financing the economy”
This anniversary marks the maturity of our business, asset management, today recognized as a key player in financing the economy. The AFG represents 700 management companies and just under 5 billion euros in assets under management, with four players among the top 25 global management groups. It should be noted that there are more than 100 companies that manage less than 50 million euros. The spectrum covered is very broad.
How do you see the concentration of the sector?
In the early 2000s, the need to strengthen the notoriety and competitiveness of our business and to reduce its operating costs made it possible to anticipate mergers. Today, this market is moving toward these mergers, which don’t stop many AMC creations. The profession attracts. These connections are a good thing. First, diversify your field of activity. The smaller you are, the more specific you are. AMCs also need more collegial management. There are also links between distribution networks and producers. I support them in strengthening end customer service, but we must be careful to keep an open architecture and a wide range.
Is the critical size for survival 500 million euros in assets?
In 1989, when I started my company, we were talking about 500 million francs … that is, less than 100 million euros. Today, being at 500 million euros after eighteen months is good. Five years later is not enough. This job is complicated and expensive. It’s better than partnering or asking questions.
What are your actions on ISR and ESG?
The AFG supports this thesis according to which to win the battle of the E (climate, environment, resources, biodiversity, etc.), we must also deliver those of the S (demography, digital, education, employment, etc. ) G (government, business ethics, compensation policies). France ranks first in Europe in terms of ESG fund management: ESG funds managed in France account for 36% of European ESG funds. Many American investors come to buy French products because they consider them the best in the world in terms of ESG. The good news is that nuclear power is being reshaped. The European Commission has addressed the issue of non-financial standards head-on, and is working with Jean-Paul Gauzès in Efrag and Patrick de Cambourg in the ANC.
“To win the battle of E, you must also fight those of S and G”
Our profession is pushing these advances alongside the public authorities to build the financial framework in the service of a sustainable economy. In order to maintain this ability to allocate savings to the financing of this new European industrial fabric, it is necessary to maintain control over two key raw materials: data and standards, issues of sovereignty for Europe and competitiveness for our country. These extra-financial rules must remain European and not as matrix-based as the accounting rules. We prefer the qualitative to the quantitative. Another condition for the success of this virtuous saving: it must be a goal pursued by all actors: issuer, investor, saver.
In this context, data has become crucial, access to accurate and reliable data …
This is the real problem. We also saw Moody’s buy Vigeo Eiris. Several problems arise with the data. Learn about the concept of “Trash in, trash out” where faulty input data causes incorrect output. It is necessary that the tickets, and therefore the data of the transmitters, are of good quality. On the other hand, the data should not be a matter of dress, but should convey clear, concise and accurate information. We don’t want to move towards simplified data. On the other hand, we need data that allows us to produce quality reports that, in shortthey lead investors to strengthen their confidence in the fact that management companies change the behavior of issuers.
The multitude of existing European labels does not help the readability …
What is happening with nuclear goes in the right direction. With some awareness, the Germans have allowed the European Commission to federate the views of others. Yes, we want a collective, common, pan-European label. We are approaching. We are all working on it.
Financial education is part of your mission, you have also joined the strategic committee on financial education chaired by Bruno Le Maire …
Within the framework of Educfi, the mission of the Banque de France is to improve the behavior of savers and investors. He asset managers they are members through the AFG. In two of our publications: the white paper Financial education: enlightened savers, actors in the economy of tomorrow and the Twelve principles for saving and investing, we are trying to make the French people aware that “put your savings to sleep “ in notebooks it is not the best option in the medium and long term. There will only be long and profitable savings if the saver is calm, confident and trained.
How does France position itself on the international stage in terms of asset management?
France is one of the world’s leading leaders and ranks first in continental Europe. Thanks to the level of training in our country, there are excellent French executives around the world. We are “technically” very well located. The problem is the allocation of assets, too often backed by real estate, with little exposure to long-term markets. However, the French Touch sells well abroad, with customers agreeing to pay the right price for management. Finally, we are lucky enough to manage large amounts from France, but there is still an issue of direct debit products, too often based in Luxembourg or Ireland, while the financial center in Paris is just as efficient.
Your projects in 2022?
We have worked on a fifteen-point presidential proposal that we will present to all candidates, the theme is “preparing the future of savers.” Topics covered include solutions capable of complementing state intervention in the face of the challenge of longer life, savings and employee participation, fiscal stability, the development of capital savings, finance as well. engine of social and environmental transition, financial education. In June, we will pass on these ideas to the new parliamentarians.
Interview with Marc Munier