Bigger and better

The news on Thursday that French private debt firm Tikehau had secured a minority investment from asset management behemoth Amundi demonstrated just how important private debt is becoming as an asset class.

Paris-headquartered Amundi Asset Management has almost €780 billion of assets on its books, making it the largest asset manager in Europe and the ninth biggest worldwide. The group’s fixed income division is enormous, as are its distribution capabilities. It has more than 3,000 institutional clients and third party distributors operating across 30 different countries. There are millions of retail clients too.

Tikehau Group, helmed by co-founders Antoine Flamarion and Mathieu Chabran, celebrates its 10th birthday in June. Its asset management arm, Tikehau Investment Management (TIM), has grown its AUM from €32 million in 2006 to €2.3 billion last year.

On the face of it, the two parties are firms of wildly differing scale. But the partnership, according to Flamarion, makes sense.

“We’re at the stage where it is important to accelerate growth if we want to become a major player in alternative assets. We looked for a partner with a big distribution capability. Amundi was perfect – they are big but they have the capacity to act in an entrepreneurial way, which is what they’ve done here in backing us,” Flamarion told Private Debt Investor.

Tikehau has a history of partnering with established groups. Crédit Mutuel Arkéa owns a 14.7 percent stake in Tikehau Investment Management, UniCredit owns an 8.5 percent stake in Tikehau Capital Advisors, and Macquarie’s corporate and asset finance lending group formed a joint venture with Tikehau to provide unitranche, mezzanine and private bonds to French mid-market businesses.

The deal sees Amundi take a 12.8 percent stake in TIM, and a 7.3 percent stake in Tikehau Capital Advisors. The two firms have signed a distribution agreement enabling Amundi to market Tikehau’s funds to its client base. This has obvious implications for Tikehau, increasing its pool of potential investors enormously, among not only the institutional community but also amongst retail investors.

Most importantly, the pair will collaborate on a new co-branded private debt-focused product in the coming months. Work on this is understood to have already begun, PDI can reveal. For more on this, watch this space.

Amundi, for its part, gets to add a private debt-related string to its bow through a proven, established manager. It has an economic interest in the management vehicle, and will derive revenue as a result of the distribution arrangement. And it also gains, as Flamarion put it, “a laboratory to pursue new ideas”.

For the wider private debt industry, the deal offers a look forward to what younger managers can aspire to, and highlights the French group’s ambition. The development of this very Gallic partnership will be interesting.