AlternativesMarch 12, 2020

AXA Launches $155 Billion Alternatives Unit

AXA IM Alts creation is in response to the ‘hunt for yield’ in a persistent low-rate environment.

Reported by Michael Katz

In a move to capitalize on investors’ increasing need to seek out higher returns in a low-rate environment, AXA Investment Managers is creating AXA IM Alts, an alternatives-focused asset management unit with €137 billion ($155.1 billion) of assets under management (AUM) in real estate, infrastructure, private debt, structured finance, and hedge funds.

The creation of the unit is part of AXA Investment Manager’s reorganization into two strategic business units: AXA IM Alts and AXA IM Core, the latter of which will have €536 billion of assets under management in fixed income, multi-asset, and equity strategies, of which 82% are fully environmental, social, and governance (ESG)-integrated.

AXA IM Alts will be led by Isabelle Scemama, CEO of AXA Investment Managers, Real Assets, and will employ over 700 people in 15 offices serving more than 300 clients from Europe, North America, Asia Pacific, and Middle East. Like AXA IM Core, the unit will integrate ESG investing into its strategies.

AXA IM Core will be helmed by Hans Stoter, AXA Investment Managers’ global head of core investments, and will employ over 600 people located in 12 offices. The changes are expected to take effect in the second quarter of this year.

“We strongly believe in leveraging both traditional and alternative asset classes to further provide investors with adequate responses to the current hunt for yield and to bring them long-term value,” Gerald Harlin, executive chairman of AXA Investment Managers, said in a statement. “We want our organization to reflect this belief and that is why we aim to implement a simplified structure comprised of two key strategic business units.”

According to financial data and information provider Preqin, the alternative assets industry surpassed $10 trillion in assets under management for the first time in 2019. Preqin also said that, based on the strong growth rate of the industry over the past five years, it is on pace to reach $14 trillion in assets in three years.

Deborah Shire, global head of structured finance, will be deputy head of AXA IM Alts bin charge of corporate development and a member of the AXA IM Management oard and will report to Scemama. Florence Dard, global head of business development for AXA IM Real Assets, will be global head of client group, AXA IM Alts, in addition to her current role, and will also report to Scemama. Matthew Lovatt, global head of Framlington Equities, will become global head of client group, AXA IM Core, reporting to Hans Stoter, and will be a member of the AXA IM Management Board.

The inclusion of three women to AXA IM Alts’ executive roster is noteworthy in an industry that has a low rate of female employment. According to Preqin data, women account for less than 20% of all alternative asset employees, and only 12% of senior employees.