Financial News

  • 26 June 2014, 16:09

CVC Looks To Pioneer £1bn Deal With UniCredit

The private equity firm behind Formula One (F1) motor racing is examining a bid to buy a major stake in Pioneer Investments, one of the world's biggest asset managers.

Sky News has learnt that CVC Capital Partners is assembling an offer to acquire as much as 50% of Pioneer, which is owned by the struggling Italian bank UniCredit.

Pioneer had assets under management of ?179bn†(£143bn) at March 31, placing it among the industry's major players.

CVC is one of several buyout firms that are interested in tabling bids for Pioneer, which is estimated to be valued at up to ?3bn (£2.4bn).

UniCredit is understood to have hired Morgan Stanley, the investment bank, to oversee a review of options and consider offers for Pioneer.

One source said on Thursday that UniCredit, which announced a record ?14bn†(£11.2bn) loss in March, was unlikely to sell more than 50% of Pioneer but that no final decisions had been taken.

In 2011, Italy's central bank intervened during a previous auction of Pioneer to prevent it falling into overseas hands.

Reports at the time said that Mario Draghi, the then Governor of the Banca d'Italia and now head of the European Central Bank, had ordered UniCredit to shun bids from foreign fund managers and instead work on the creation of a national powerhouse in the sector.

It is unclear whether there has been any similar intervention to keep a controlling stake in Pioneer in Italian ownership.

While UniCredit's fortunes have faltered under the weight of bad debts incurred as regulators prepared to conduct stress tests on major European banks, Pioneer has performed strongly.

The fund manager has a presence in 27 countries and what it refers to as "global investment hubs" in London, Boston and Dublin.

A Financial Times report in March that Pioneer was likely to be floated or sold next year was subsequently denied by Federico Ghizzoni, Unicredit chief executive.

He described Pioneer as "highly strategic" and said the business was not for sale.

The boss of the Milan-based lender has outlined plans to sell other assets, including Fineco, an online consumer finance provider, and UniCredit Credit Management Bank, its debt collection arm.

If a major stake in the business does change hands, it would be the latest in a series of deals involving asset managers owned by Europe's biggest banks.

In the UK, Lloyds Banking Group recently sold a majority stake in Scottish Widows Investment Partnership, while Royal Bank of Scotland offloaded its fund management unit soon after it was rescued by UK taxpayers in 2008.

A CVC spokesman declined to comment on its interest in Pioneer.

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