Created by the merger of SGAM and CAAM in 2010, Amundi completed its IPO in 2015 and reinforced its status as a global player by acquiring rival Pioneer Investments in 2017. More recently in January 2022, it completed the acquisition of passive specialist Lyxor Asset Management, and the combined entity is now the second-largest exchange-traded fund provider in Europe.
As the integration between Amundi and Lyxor unfolds over the next few months, we expect duplicate passive offerings to be either gradually culled or repositioned to allow for product differentiation. In particular, the firm indicated its desire to continue giving investors a wide range of options between physical and synthetic replication, as well as between plain-vanilla and ESG versions of most benchmarks. Although the group does not plan to pass down the economies of scale created by the merger through generalized fee cuts on its ETF range, we appreciate that its passive products were already priced competitively relative to the industry average prior to the Lyxor acquisition. Meanwhile, Amundi has also continued the painstaking effort of rationalizing its active fund range, cutting down the number of mutual funds it offers by around two thirds since 2019. This could benefit investors as the group seeks to focus resources on its most successful franchises. But on the flip side, Amundi's ambitious ESG objectives have more recently led it to launch a significant number of new sustainable strategies, which could ultimately counteract these rationalization efforts.
Incentive structures for portfolio managers and analysts are in line with industry norms, and while some team members invest personally in the funds they manage, it's far from being a common practice at the firm. The group also continues to grapple with the operational challenges of a complex, multilayered organization. These came painfully into focus in 2021 when the French regulator Autorité des Marchés Financiers imposed a EUR 32 million fine on Amundi for significant failures in risk and trading controls that allowed two employees (one portfolio manager and one trader) to purposely favor one of the accounts they were responsible for over another identically managed account. During the AMF's multiyear investigation that culminated in the fine, Amundi had promptly reimbursed clients for the prejudice they incurred and took steps to close the gaps in its processes that had allowed the breaches to occur. Still, we view this regulatory incident as significant, and we will continue to monitor the company's efforts to shore up its risk and monitoring tools going forward.