'Incredibly happy and here forever', says CEO of Europe’s top AMC on India exposure

Valerie Baudson

Amundi, Europe’s largest asset management company with over €2 trillion in assets under management, serves a thousand institutional clients globally and about 100 million retail clients through 600 savings and wealth partners worldwide.

Since taking over as CEO in 2021, Valerie Baudson has been aggressively expanding Amundi’s footprint in Asia even as Europe remains the firm's mainstay. And India stands at the center of its growth strategy in Asia. Amundi’s presence in India is anchored by its two-decade-long partnership with SBI Mutual Fund, the country’s largest mutual fund house, managing ₹10.77 lakh crore in assets.

Concerns over slowing growth in India, high valuations, and the ongoing market correction do not shake Baudson’s confidence in the Indian business or its ability to deliver returns for investors globally. She says she is “very happy” with the partnership and is invested in India “forever.”

Unlike in other markets where Amundi relies on its own fund managers and analysts to track equities and bonds, it treats the Indian joint venture as its own, drawing on SBI Mutual Fund’s expertise and actively selling its products worldwide. Edited excerpts from a free-wheeling conversation.

You seem to be betting big on Asia – what’s the attraction?

We believe that this continent (Asia) is the future, for three reasons. First, the GDP growth of the continent is much higher than anywhere else in the world. When you have growth, you have individuals having more money and institutions having more money to manage. The second reason is the demographic growth, of course, and especially the development of a middle class in a lot of countries in this region.

When you access middle class, you access obviously a need for saving solutions at the same time. The penetration and development (of the middle class) will vary from country to country, but the trend (of a growing middle class) can be seen everywhere.

The third reason is that, even if this continent is much younger than the rest of the developed world, it still it is aging. And aging means retirement solutions and retirement solutions is the third driver of growth in our industry.

How much of your assets are from Asia currently?

In stock terms, out of $2.2 trillion of assets that we have, we are closing $500 billion in Asia and roughly $100 billion in the US. The rest of the holding is in Europe. In terms of flow, the two geographies (Asia and Europe) contribute half and half. Of the $55 billion in flows that we got in 2024, half of it came from Asia and half from Europe, a little bit came from the US too.

What is your experience of China? How does it compare with your experience in India?

China is much less important than India for us. In China, we have two different kinds of set ups. One is through two joint ventures with two important banks, which are Agricultural Bank of China (ABC) and Bank of China (BOC), to offer saving solutions to retail clients. The second is working directly with big institutional clients. But, in terms of stock of assets, not just China, even Japan, where we have been present for a very long time, contribute less than India.

Our JV in India is much, much more important for us and is faster growing for various reasons. The GDP growth is absolutely different between the one and the other (China and India). The industry growth (in India) is much more rapid. The quality of our partner here – SBI -- is absolutely incredible. We have two ways of operating in Asia, either through JV partners like in China and India, or directly in markets where the industry is more developed, like in Hong Kong or Singapore or Tokyo.

A lot of global companies are selling stakes in Indian companies because of the rich valuations. Would you push for the listing of SBI Mutual Fund? Would you like to cash out on high valuations?

The listing is obviously the decision of the majority shareholder, which is SBI. We have been here for 20 years and we are incredibly happy with this relationship. We are here (in the Indian market) forever, it’s (our plans) are for the very long term.

Since you are so bullish on India, would you not like to push for a higher economic interest from the current 37% you have?

No, I think we have a balanced relationship with SBI for 20 years now. Increasing the stake has never been on the table. The deal from the very beginning was that SBI wanted an international partner to help them grow (in other geographies). It’s been a win-win partnership.

We really use SBI MF as our own Indian operation. When our very large emerging equity or bond teams invest, they invest through SBI MF in India. Last year, for the first time, we decided to export SBI MF around the world.

In your role as the CEO of Amundi, you must be privy to conversations of European companies’ Boards. How are the Boards seeing India? How have their views changed from the pre-pandemic year 2019 to now?

Politically, the strength of India and the presence of India on the world map is much stronger, or at least perceived (as being stronger), today than it was five years ago.

It is obviously linked to the economic growth of India, the fact that not only the population, but the various services and industries of India are becoming more and more powerful.

Indian equities represent more and more in the large emerging indices, and Indian bonds are now in the bond indices, which has absolutely changed things.

So international investors are interested not just because of India’s growth, which is a bright spot in the world today, but also because of they are now a part of global indices.

India’s GDP growth is coming off from the highs it saw over the last four years. Of course, we’re looking better than the rest of the world, but are you concerned?

For me, it’s a long-term view that holds for all reasons. It is a relative game. Even if the growth has slowed down a little bit in the first quarter, compared to the rest of the world, it's still an incredible growth. It (India’s GDP growth) is between 6-7 percent. Growth will be much less in China and no more than 2 percent for the U.S. next year.

Besides, technology is one of the reasons that India is becoming so important in the world, some of the best talents in the field are from here. The financial industry too is incredibly solid and efficient in India, which is always a sign of solidity in the country (which builds trust).

What’s your sense on the ongoing correction in India and stock valuations? There are some foreign investors who are keeping faith in India but largely foreign money is only moving out…

The Indian story, I'm very confident, will be good one for the long run, whatever the valuation.

When you invest in stocks, it also depends on who you are as an investor, but you generally invest for the long run. I have no worries on that score (high valuations). It’s normal for investors to take their profits when valuations are high. Perhaps that’s why we saw the little correction (in the Indian markets) recently.

What’s your view on Trump’s policies? What will be the repercussions for the financial markets?

The financial markets have done well so far. From now, we will probably see a bit more volatility based on the decisions made, especially those around tariffs. Diversifying investments in equities is the best way to deal with this volatility.

You are a champion of ESG funds. Under the Trump regime, the ESG story seems to be reversing. How do you think this will play out?

Our purpose is to act every day in the interests of our clients and society. It's also the purpose of Credit Agricole. Responsible investing is in our DNA. We are especially active in making sure that we develop investment capacity in climate change and energy transition. Worldwide, we are the leading active management in net zero solutions. In active management, we hold close to $250-300 billion of responsible investment solutions across asset classes. We will never change that.

But if the divergence in returns from ESG and non-ESG themes are significant, don’t you see investors rejecting it?

I have a very strong view on that. First of all, because whatever happens politically, anywhere in the world, we still need to work on energy transition. Therefore, we will need investments (for this transition) and we deliver these investment solutions to our clients.

In the short term, maybe on a yearly basis, it (the returns) can go in one direction or the other, very much depending on the oil price. But in the long run, I'm absolutely convinced that companies who invest cleverly in energy transition, who are careful about climate change, who are careful about social responsibility as well, will be the winning ones financially.

Also, when we look at large institutions, whether it is in the US, the UK and an increasing number in Asia, are investing into ESG themes.

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