Today, Alessandro Profumo, UniCredit’s CEO, is expected to step down today due to a power struggle at Italy’s largest bank. It looks like Libya has increased its stake in UniCredit and that’s causing problems with some banking foundations that also own UniCredit shares, according to Bloomberg. Libya’s combined interest totals about 7.6%. (Here’s a Q&A from my compadres at Reuters explaining why the Libyan investments are causing such a stink).
So what does this mean for Pioneer? Not all that much, sources say. The Pioneer auction is expected to proceed while UniCredit will likely seek a joint venture partner in Europe. The Italian bank, which is believed to want to sell all of Pioneer, will consider a sale of the U.S. operations separately, a source says.
UniCredit this past May hired Bank of America to suss out all alternatives for Pioneer, which could include a sale, an IPO or a joint venture. Pioneer had about $236 billion in assets under management, including roughly $58 billion in the U.S., as of Aug. 31.
In July, I reported that the auction for Pioneer was set to begin in September, because UniCredit didn’t have broken-out financials for Pioneer’s U.S. businesses. Books couldn’t be sent out until they had them, sources have told peHUB. Geoff Smith, a Pioneer spokesman, says books for the asset manager haven’t gone out yet. Smith declined to say what is taking so long or when they would go out. However, a different source says that Pioneer’s books are expected to be finalized in a few weeks.
Pioneer’s auction is expected to generate a lot of interest. European banks like Natixis, BNP Paribas, Societe General and Amundi are expected to bid. European and U.S. buyout shops like Permira, BC Partners, Apax Partners, TA Associates, KKR, Bain Capital, Carlyle Group and Hellman & Friedman, are anticipated to be interested. U.S. strategics MFS Investment Management and John Hancock Funds are interested in Pioneer as well but likely only want the U.S. operations. This could put them at a disadvantage. Federated Investors, Northern Trust, State Street and Ameriprise Financial could also be bidding.
In 2000, UniCredit bought Pioneer Group, a publicly-traded company at the time, for $1.2 billion. UniCredit then combined the company–which it called Pioneer Investments– with its asset management operations in Europe.
UniCredit could receive $1 billion for all of the business, a source says. The U.S. operations could go for $600 to 700 million, sources have told peHUB.
Officials for UniCredit couldn’t be reached for comment.