UniCredit considers sale of Ireland’s biggest fund manager

UniCredit is considering a full sale of its Pioneer asset management arm as it looks to raise capital and shore up its balance sheet after ranking sixth from the bottom in European bank stress tests, according to four sources with knowledge of the matter.

New chief executive Jean-Pierre Mustier is seeking to boost capital buffers at Italy’s only globally systemic financial institution. Previous chief executive Federico Ghizzoni quit in May after months of shareholder discontent.

Mr Mustier, a veteran French banker, is due to present a strategic plan before the end of the year.

Bankers say it is shaping up as a three-pronged overhaul. In addition to putting assets including Pioneer and Polish bank Pekao up for sale, Mr Mustier is also considering hiving off tens of billions of euro of bad loans into a new securitisation vehicle, and a capital increase of up to € 10 billion, say bankers.

UniCredit declined to comment.

Tactics changed

Italy's largest lender by total assets has changed tactics recently over Pioneer Investments, which has $245 billion (€217.5 billion) of assets under management, bankers said. It initially tried to sell a controlling stake of the unit to Santander, but those plans fell through in July.

Regulators suggested that the benefit to UniCredit’s balance sheet would be smaller than expected if the Italian bank went through with its plan to retain a 33 per cent holding in Pioneer. Italian regulators were also unhappy with the idea of selling the asset manager, which is a significant holder of Italian sovereign debt, to a foreign buyer, said one banking source.

UniCredit said during the summer that it would consider a public offering of Pioneer – a plan that is still on the table, bankers said.

UniCredit is holding talks with Poland’s PZU over the sale of Pekao.

Alongside asset sales, Mr Mustier is also considering splitting off tens of billions of euro worth of UniCredit’s non-performing loans, the bankers said. These loans could be put into a new vehicle that would issue some securities backed by an Italian state guarantee, known as GACS, these people said. The bank is looking for a potential anchor investor to buy into the vehicle, say bankers. – (Copyright The Financial Times Limited 2016)