Full-year 2021 earnings
- Strong growth across the board
- Underlying earnings up 25% at €348 million
- Revenues up 14% at €1,478 million
- Net inflows up €12 billion
- Assets under management reach historical high of €887 billion
- Increased role in society as a responsible asset manager
“2021 has been an excellent year for AXA IM, with exceptional operational performance illustrated by strong revenues and underlying earnings growth. This was fuelled by both investment business units, AXA IM Alts and AXA IM Core, and all client segments.
Our asset base is yet again reaching a historical high, due to the commercial momentum with third-party clients and strong market levels.” said Marco Morelli, Executive Chairman of AXA IM.
“We have conducted tangible actions in order to play an increased role in society as the current environment has reinforced our conviction that any growth has to be achieved in a sustainable manner with a long term vision.
As allocators of capital, it is our responsibility to play a leading role in the transition to a more sustainable economy. We have increased ESG disclosures, bolstered our ESG offering and the channelling of capital towards sustainable strategies, set up stricter standards for climate laggards and the oil & gas sector and focused engagement initiatives. As a business and employer, we are offering our employees a revised employer promise centered on greater work-life balance and quality of life at work, working on inclusion and diversity at all level of our organization and committing to becoming carbon neutral by 2050.”
“Looking ahead, this set of results is a strong basis for perpetual sustainable growth and the delivery of long-term value for our clients, as we continue to act as Stewards for Progress – as an investor, an employer and business.” added Marco Morelli.
Full-year 2021 key highlights
All figures are sourced by AXA IM and are as of end 2021, unless otherwise specified.
Underlying earnings were up 25% to €348 million1 , as a result from higher revenues.
Net Revenues were up 14% at €1,478 million2 , driven by higher management fees. Recurring revenues account for 91% of the total revenues.
Net inflows amounted to €12 billion, with alternative strategies being in high demand.
These positive net inflows include:
- €12 billion from third-party clients, due to a commercial push on strategic priorities by both Alts and Core investment business units.
- €2 billion from joint ventures in Asia,
- €3 billion from AXA Insurance companies inflows offset by €4 billion of outflows linked to the impact of the reinsurance transaction in AXA Hong Kong.
ESG-integrated assets accounted for approximately 75% of third-party net inflows overall.
Assets under management amounted to €887 billion, up €29 billion compared to the end of 2020, reflecting net inflows and positive FX market effects.
The underlying cost income ratio improved by 3.8 points at 68.1%, as a result of revenue growth.
- At constant FX.
- Revenues net of distribution fees.
Continuous growth of the Alternative investment business unit fuelled by strong commercial success
AXA IM Alts brings together real estate equity, private debt & alternative credit, private equity, infrastructure and hedge funds expertise at AXA IM.
The Alternative business unit recorded €15 billion of net new money3 in total, including €6 billion from third-party client.
Assets under management now stand at €183 billion, up 14% versus year-end 2020.
Revenues are up 18% at €591 million.
In terms of capital raised4 , AXA IM Alts has reached a record €18.2 billion of capital raised in 2021 overall, including €10.2 billion of third party money, largely directed towards Private Debt & Alternative Credit and Real Estate Equity, two of the pillars of AXA IM Alts where it holds market leading position (#1 Real Estate Manager in Europe5 and #4 capital raiser in private debt worldwide6 ).
Capital raised from third party clients was almost equally spread between European and non-European clients, reflecting the successful globalization of the client base, with a strong contribution from Asia Pacific and North American clients.
AXA IM Alts raised €8.3 billion in Private Debt & Alternative Credit, with significant inflows into its real assets debt strategies (€3.8 billion), coming notably from investment into funds or large scale mandates from Japanese, US, Dutch and French clients. AXA IM Alts also collected significant amounts of capital for its US and European managed CLOs (€1.6 billion), Dutch mortgages (€0.9 billion), Secured Finance strategy, with close to €0.5 billion raised as well as through the successful closing of the 8th generation of its Risk Sharing Transactions strategy (with 1.2bn raised in total since launch).
AXA IM Alts raised €6.3 billion for Real Estate Equity strategies with €2.1 billion directed to its core real estate open-ended fund range, with its flagship pan-European diversified strategy passing the €5 billion mark in assets under management. AXA IM Alts also successfully completed the first closing of its fifth-generation development strategy which seeks to meet society’s changing real estate needs post Covid, with c.€800m raised.
The business unit also raised €3.7 billion in Private Equity and Infrastructure, with notably 1.9 billion raised since December 2020 for European Life Sciences investments, an emerging and high potential sector, with capital raised primarily contributing to further develop Kadans Science Partner and consolidating its market leading position in Europe. AXA IM Alts also pursued the expansion of its infrastructure equity platform with more than €900 million raised over the period and an active deployment over the year.
- Invested capital raised money.
- Sum of new gross capital commitments from investors.
- INREV Fund Manager Survey, May 2021. #1 Real estate manager in Europe based on total value of non listed real estate assets under management
- Private Debt Investor (PDI) 100 Global Annual Review, December 2021. Ranking based on capital raised over five years.
Continued business momentum for the Core investment business with third-party clients
AXA IM Core brings together the Fixed Income, Equities and Multi-Asset platforms at AXA IM.
The Core business unit has raised €5 billion of net new money from third-party clients, offset by outflows deriving from the Main Fund.
Assets under management now stands at €594 billion, up 3% versus year-end 2020, of which 85% are now fully ESG-integrated.
Revenues are up 12% at €872 million.
Commercial momentum derives from the focus on blockbusters (strategies having more than €1 billion of assets under management). Over five years, 67% of cross-border funds are ranked in the first two performance quartiles7 .
Implementation of SFDR level one resulted in 88% of eligible funds and strategies being classified as article 8 or 98 .
The development of the ACT range9 (the most advanced ESG and listed impact strategies) is prospering, with €3.3 billion inflows. This range now accounts for €29 billion of assets under management.
Fixed Income saw very strong momentum from third party clients due to the diversified set of expertise. With high inflation impacting market participants in most regions around the world, the inflation franchise has attracted record inflows from institutional and retail/wholesale investors in open-ended funds. Total return, Buy & Maintain credit and ESG strategies, particularly green bonds – currently exceeding the €1 billion euros threshold – kept traction and continue to see sustained client demand.
US High Yield saw significant appetite from third party clients, AXA IM being a market innovator with the launch of one of the first carbon-focused High Yield strategies on the market.
The Equity platform, which now comprises the fundamental (formerly Framlington) and quantitative (formerly Rosenberg and now Equity QI) teams, asserted strong growth in the thematic range, particularly within Digital Economy and Clean Tech strategies. The global Thematic equity range now has €17 billion of assets under management. The development of ESG impact solutions continued and the first carbon offset strategies were launched by the Equity QI team.
From a Multi-Asset perspective, global overlay strategies to limit drawdowns were in high demand from institutional clients, while the Multi-Asset impact strategy has now reached a critical size. The new range designed according to client’s risk profile in Belgium confirmed its promising launch with retail clients.
- Source: Morningstar, December 2021.
- Eligible funds. The product categorisation is provided based on the basis of the European Directive (EU) 2019/2088 on the sustainability-related disclosures in the financial services sector (“SFDR Regulation”) and state of knowledge at the time of creation of this document. As of today the SFDR related regulatory technical standards are not yet finalised and enforced and while we monitor closely regulatory developments, the product categorisation shall be re-assessed once such regulatory technical standards are published and may evolve.
- The ACT range (internal classification): these assets invest with a purpose to support the transition to a more sustainable economy. Funds have been assigned thematics aligned to ESG and/or UN’s Sustainable Development Goals (SDGs) objectives. Active stewardship is a key focus for this range, with voting and engagement reporting available at fund level. This range encompasses sustainable and listed impact funds.
Increased role in society as a responsible asset manager
AXA IM has set the ambition to be the world’s leading responsible asset manager, overreaching three dimensions.
As an investor, through allocation of capital and engagement, notably with:
From 2022, the implementation of a reinforced engagement and stewardship policy, supporting climate leaders and companies that are truly transitioning while targeting climate laggards, as well as a strengthened investment policy for the oil and gas sector with new exclusions.
Continued investments in green assets (impact bonds, green listed equity and green real assets). These assets represent c. €38 billion.
Acceleration of the proportion of net zero assets in 2022 and over time.
As a business, through efforts to be a responsible and resilient company:
- By financing and supporting research projects that are finding sustainable solutions to unsolved environmental and social challenges, just like the recently launched AXA IM Transition award10 .
- By perpetuating the impact philanthropy commitment to donate 5% of the impact fund range’s fees to several charities supporting education, biodiversity & climate and health initiatives.
- By taking a series of steps to address its own carbon footprint to be a net zero business by 2050, with an intermediary target to reduce CO2 emissions by 25% by 2025 vs 2019.
As an employer, through taking steps to be a more inclusive company:
- By offering a modern, flexible and caring working environment.
- By enabling employees to learn, grow and be future-ready.
The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested.
- See: https://www.axa-im.com/media-centre/axa-im-and-axa-research-fund-announce-winner-axa-im-climate-transition-award