(Bloomberg Opinion) -- Amundi SA, Europe's biggest fund manager, had a record-breaking 2021, with assets under management topping 2 trillion euros ($2.3 trillion) for the first time. To mount a proper challenge to the market dominance of BlackRock Inc., though, it needs to reduce its reliance on European customers and improve its global presence.
Net inflows in the fourth quarter of 65.6 billion euros were almost four times bigger than analysts were expecting. The purchase of Societe Generale SA's Lyxor fund management business also helped swell the asset pile, keeping Amundi at the head of the European pack. Yet that still leaves it at about a fifth of the size of market leader BlackRock, as measured by managed assets.
Amundi grew its presence in Asia by 24% last year, increasing its assets to 369 billion euros from 298 billion euros. But its stated goal to manage 500 billion euros in the region by 2025 looks unambitious, given how rapidly the savings and investment markets in both China and India are expected to grow in the coming years.
The market for low-cost passive products continues to be a key domestic battleground. In January, Amundi said it's aiming to expand its passive business by 50% in the coming three years.
The purchase of Lyxor, whose assets of 148 billion euros include more than 100 billion euros of exchange-traded funds, enabled Amundi to leapfrog German rival DWS Group GmbH into second place in the European league table of ETF issuers. But again, BlackRock dominates the market with a share of more than 40% that will be difficult to erode.
Amundi's parsimony continues to be best-in-class, with its cost-to-income ratio dropping to 47.9% last year compared with 58.1% at DWS. Now it will have to work some of its frugality magic on Lyxor, where the cost-income ratio is a less impressive 72%.
Rising stock markets lifted the fund management industry's boats in 2021. This year is off to a much more difficult start, making economies of scale even more important for money managers.
Some smart European acquisitions in recent years have already made Amundi the biggest player in its home market. If it wants to compete on the world stage, it needs to accelerate progress in Asia either by expanding its joint ventures or by launching a buying spree in the region.
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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."
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