PE Firms Likely Out Of Pioneer Auction

Books for Pioneer Investments aren’t out yet but the possible sale looks like it has shifted.

UniCredit Group, which is looking to sell all of Pioneer, wants to combine the business with another asset manager and retain a take, two sources say. “Unicredit wants to do a contribution transaction,” a banking source said.

I initially thought UniCredit’s strategy was similar to Morgan Stanley’s sale of its retail funds unit earlier this year to Invesco. Morgan kept a 9% stake in the funds business. However, I’m being told that UniCredit’s plans are more similar to Credit Agricole, which bought part of Societe General’s asset management arm. The banks, in 2009, created Amundi, their combined asset management arm which is 75% owned by Credit Agricole and 25% owned by Societe General.

So, private equity bidders are not being included in the Pioneer auction right now, sources say. “PE can’t do that type of transaction,” the banker says. Buyout shops like Permira, BC Partners, Apax Partners, TA Associates, KKR, Bain Capital, Carlyle Group and Hellman & Friedman were expected to vie for the unit.

Boston-based Pioneer had about $236 billion in assets under management, including roughly $58 billion in the U.S., as of Aug. 31.

Major global firms that can buy all of Pioneer are seen as possible bidders. European banks like Natixis, BNP Paribas, Societe General and Amundi are expected to bid. U.S. strategics such as MFS Investment Management and John Hancock Funds are interested in Pioneer as well but likely only want the U.S. operations so they may be out.

While the books for Pioneer aren’t available yet, UniCredit has been sending out NDAs—non disclosure agreements—to buyers who will bid on all of the business, persons say.

Officials for Pioneer and UniCredit couldn’t be reached for comment.