Despite a challenging and uncertain environment, AXA Investment Managers (AXA IM) continued to demonstrate strong growth in 2016 with record net new money inflows of €56.4 billion.  AXA IM’s assets under management (AuM) at the end of December 2016 were €717 billion up 7 per cent from €669 billion in 2015.

Andrea Rossi, CEO of AXA IM, commented on the results: “2016 was a year characterised by uncertainty, driven in large part by political events. This uncertainty translated into market volatility which has a direct impact on both our clients and our business. Given this backdrop I am very pleased that our annual results demonstrate continued strong growth, which reflects not only the resilience of our business model, but also, most importantly, our focus on helping clients meet their long-term objectives regardless of the market environment.”

Statistical information

AXA IM’s assets under management at the end of December 2016 were €717 billion, up 7 per cent compared with 2015. This increase in assets was mainly driven by record net new money inflows of €56.4 billion, representing a 35 per cent increase on 2015. AXA IM’s joint ventures in Asia contributed €38.5 billion in net new money inflows.

Revenues were €1,207 million, down 2 per cent compared with 2015, due to lower management fees as a result of the withdrawal of assets previously managed on behalf of Friends Life, while transaction fees increased by €12 million. Excluding Friends Life, revenues were €1,189 million, up 2 per cent compared with 2015. Similarly, underlying earnings were €225 million, down 4 per cent compared with 2015, but up 8 per cent excluding Friends Life.

“Growth and inflation are back,” comments Laurence Boone, Head of Research at AXA IM. “2017 looks set to be another challenging year, not only due to lots of known unknowns, such as Trump and forthcoming European elections, but also the new (modestly) higher rates environment. The combination of ongoing supportive monetary policy and improving domestic situations will, in the absence of exogenous shocks, continue to support growth. We project that global economic growth will rise from 3.1% in 2016 to 3.4% in 2017. In this environment, the dominant themes for investors will be the return of inflation and higher interest rates.

“The backdrop of rising rates in an uncertain environment makes life more complicated for investors in the short-term and means we favour an asset allocation focusing on strong fundamentals rather than mispriced valuations and more active asset allocation as the rising rate cycle materialises. Longer-term, the picture is more supportive, with trend growth recovering across the board, albeit to lower levels than pre-2008. Rates premia should be on their way up, although again to a lesser extent than pre-crisis levels.”

Andrea Rossi concluded: “2016 was a challenging year for investors and 2017 looks set to offer further uncertainty. We remain committed to supporting clients through our insight, investment expertise and focus on service, helping them to invest for the future. In a changing market environment, we are committed to supporting our clients in evolving their asset allocation and ensuring we have the solutions to meet their needs. Our consistent growth over the past five years provides a solid foundation for us to accelerate further in 2017 while recognising the many headwinds including regulation and pressure on fees. Growing third party assets, particularly in the retail/wholesale space, remains our top priority and we will continue to invest to support this goal, both in-house and where appropriate via external opportunities.”

Source: AXA Investment Managers