French bank BNP Paribas will buy a 22.5% stake in wealth management company Allfunds as part of a deal to set up a new investment platform with Allfunds.
The partnership will allow the firms to develop next-generation fund distribution services, according to an official statement put out by the groups.
As part of the deal, for which financial terms were not disclosed, BNP Paribas Securities Services will transfer its Banca Corrispondente local paying agency activities in Italy, as well as some Italian transfer agency services, to Allfunds, where they will complement its existing range of local fund distribution services.
In addition, the bank will entrust Allfunds with the management of distribution contracts of third-party investment funds for several BNP Paribas Group entities in its retail, wealth management, insurance and asset management businesses. In return, Allfunds clients will benefit from BNP Paribas' experience in asset servicing and asset management.
This deal represents a major step in our ambition to be at the forefront of wealthtech"
This is the latest sign of asset managers looking to trim operational costs in the face of rising regulatory expenses and pressure on fees from investors.
Patrick Colle, CEO at BNP Paribas Securities Services, said: "The demand for fund distribution platforms is growing and we want our clients to be able to take advantage of the opportunities they present. This partnership will enable us to significantly enhance our offering, giving our clients access to a successful and fast-growing fund distribution platform. It will also enable us to accelerate the development of next-generation fund distribution services and data analytics."
Juan Alcaraz, CEO of Allfunds, added: "We are proud to enter into an agreement with BNP Paribas, a leading bank in the Eurozone and a prominent international player. This deal represents a major step in our ambition to be at the forefront of wealthtech. By relying on our platform and BNP Paribas' integrated business model, we will be able to empower clients with optimised fund distribution services and innovative digital solutions."
This cooperation comes in the wings of Allfunds acquiring a stake in Credit Suisse's cross-border fund sales hub InvestLab, which allows Allfunds to administer €500bn assets.
Singapore's sovereign wealth fund GIC and private equity investor Hellman & Friedman bought Allfunds in 2017.