Good morning to all, and welcome to Olympic Paris. As you know, it's the day of the opening ceremony of the Olympic Games for 2024. It's also the day when we published this morning our Q2 and first half results. I'm Cyril Meilland, the head of investor relations, and I'm here to introduce you to this conference. I will first spare you the reading of a disclaimer. Unfortunately, as you know, it's a requirement, especially in the prospect of the operation with Victory. I will not read it, but please keep in mind that it's on the second page of the slide deck, and I strongly encourage you to actually read it. In terms of housekeeping, we will also be very grateful if you could open your camera so that we have a real and live dialogue face to face. During the Q&A session, please raise your hand.
I will unmute your mic, and you will be able to ask as many questions as you want after the presentation. Now, back to the funnier part. [Foreign language] . As you know, this is the Olympic motto. It's for you to judge whether this is the best way to appreciate the results we published this morning. But definitely, Valérie Baudson, our CEO, and Nicolas Calcoen, our deputy CEO, are here to demonstrate that Amundi is in Olympic form. And so I will leave the floor to them to detail the results.
Thank you very much, Cyril, and good morning to all. Thank you for attending this video conference to present our Q2 and H1 results. As usual, I will first comment on the highlights of the quarter, and then I will leave the floor to Nicolas, who will detail our activity and results before we take your questions. Amundi posted a very robust performance in the Q2, as much in terms of sales as in terms of profitability. We have continued our development in the key strategic areas that we had prioritized in our Ambitions 2025 plan. To illustrate our high level of performance, let me mention a few very telling figures. Starting with the business, with our clients, we gathered in the Q2 more than EUR 15 billion in net inflows, well diversified between active, EUR 8 billion, and passive management, EUR 6 billion.
Our net profit is EUR 350 million in the quarter, showing a strong growth of more than 9% compared to the same quarter last year. The growth in profitability is the direct consequence of our business momentum, which has supported our revenue growth of 8% year-on-year. We took advantage of two boosters to leverage this top-line performance into solid profit growth. First, the further improvement in our cost efficiency, taking our best-in-class cost-income ratio to 51.9%. Of course, the fast growth of our JVs. I will come back to that. This growth in profitability was achieved in parallel with our development along our strategic priorities. I would especially like to highlight this quarter, our momentum in Asia and with third-party distributors, two topics on which I will elaborate in the coming slide.
And finally, as you know, since the beginning of the year, we have signed two deals that will boost our organic growth in key markets. First, the acquisition of Alpha Associates, which was closed at the beginning of the Q2. And so we now have the first full contribution from this business. The integration of the teams is underway, and we have presented our new ambitions in the private market multi-management business to Alpha's and Amundi's clients. New strategies are about to be launched, and we shall give you more details when we publish our Q3 results. And second operation, we have signed, as you know, the definitive agreement with Victory Capital, a significant milestone in this new partnership.
When the deal closes in early 2025, Amundi will participate in the development of a very successful franchise in the U.S., and we shall be able to offer our clients outside the U.S. a wider range of high-performing U.S. strategy. So now, let me give you a few more details on our growth initiatives. So, as I was telling you, I would like to start with Asia. You know, this is our second home market after Europe, with a full setup, a deep footprint across the continent, and a large asset base with a very diversified and large range of clients. We now already manage more than EUR 450 billion for Asian clients. And just as a reminder, this figure was multiplied by four in less than 10 years. As you can see on the chart, this asset base is well spread across the continent and across many client relationships.
This was achieved thanks to the retail distribution partnerships with leading local banks via our joint ventures, but also in our third-party distribution business line, thanks to our unique combination of investment management expertise and capability to offer services. We have also developed strong relations of trust with key institutions in the region in all countries. You have a few examples, a list on the slide, which is obviously far from being comprehensive. In addition to these retail partnerships and direct institutional business, most of our joint ventures have themselves developed over time their franchise with institutional and retail clients. Our Indian JV, for example, already has independent distribution channels, both physical and online, to address the client base outside SBI branch network.
So globally, to this large Asian client base, we sell both locally managed and international strategies, and we have started exporting some of our local strategies, for example, this quarter, those managed by our Indian JV that we exported to Japanese clients very successfully. So for me, this very strong franchise and setup is really a solid launchpad for business in the continent. As you can see on the next slides, we have gathered EUR 22 billion from our clients in the region in the first half of this year. This is a record level representing a very high net flow rate of 10% annualized. All countries and client segments contributed to this performance. Of course, India stands out with more than EUR 12 billion. You know that our JV, SBI MF, is the market leader with an 18% market share, takes the advantage from a booming local market, obviously.
What is really interesting is that all major countries posted a significant contribution to growth, with a special mention in China, where we gathered more than EUR 3 billion in the first semester, half from our two JVs with BOC and ABC, and half from our direct institutional business. It seems that the local market fund, the local market for mutual funds, which has been, as you know, a bit hard recently, is now really stabilizing. In China, last but not least, we have also reached a new milestone in technology and services since Amundi Technology has signed during Q2 our first deal for Alto with a major local bank, Bank of Beijing. As a consequence, the contribution to revenues and profits from Asia increases.
A good illustration of this is the acceleration of the profit contribution from our JVs at +25% in the Q2 compared to the same quarter last year. Asia is definitely a driver for growth for Amundi. It's a region where we are very confident that we have the right setup with the right partners, and we are well positioned to take full advantage of the positive trends for economic growth and the development of asset management across the continent as a key solution to invest a fast-growing pool of savings. Turning now to another huge success of the past 10 years, third-party distribution. This business line now accounts for more than half of the total retail segment, more than all the partner networks combined, whereas it was only 40% of total retail in 2020.
It has gathered close to EUR 360 billion in assets from its clients, almost multiplied by two once again since 2020. It does accelerate with net inflows of EUR 15 billion in the past 12 months, of which 12 in the first semester. This business line today has around 600 major clients worldwide, a very, very much diversified client base: private banks, wealth managers, retail banks, life insurers. It is, interestingly, also developing very fast with online distribution channel, which now represents 26% of its net inflows. We globally have a lot to offer to these client distributors and their clients, of course, the full range of investment expertise in active, passive, treasury products, and private markets, with, as you know well, a very comprehensive responsible investment offering.
But we also propose to all these clients worldwide a wide range of technology and services covering the full value chain of savings management, including, of course, Alto, Fund Channel, discretionary portfolio management, advisory tools, fund selections, training solutions, etc. So in a nutshell, organic engines are doing well, which is great. We also have been able, since the beginning of this year, to complement organic growth with two deals, as I was mentioning in the introduction, and this will, of course, help us to accelerate our development. Alpha Associates, which is now in the integration phase, and Victory Capital, which I will now spend a few minutes on, as we have signed the definitive agreement earlier this month. So this partnership with Victory Capital was signed on 9 July.
As you recall, the project is to combine Amundi U.S. with Victory Capital, with Amundi Group taking a stake of 26.1% and becoming the largest and strategic shareholder of Victory Capital, and to establish long-term 15-year reciprocal distribution agreement between Amundi and Victory. This operation is a unique opportunity to strengthen our presence in the U.S., fully in line with our strategy in this large country and savings pool. With this deal, our clients would have access to a broader set of high-performing U.S. strategy. This is especially important for our Asian clients. This access is secured in the long run thanks to the distribution agreement. We also create a strong, very comprehensive U.S. investment platform with large distribution capacity locally, in which Amundi would have a 26.1% stake. This deal obviously will therefore create a lot of value for our clients, but also for our shareholders.
In addition to its promising organic growth prospects, the new combined entity has already identified $100 million of cost synergies achievable within two years that will boost its profitability. All this, as you remember, without any cash disbursement, any issue of new shares. The deal will be materially accretive on Amundi's net income and earnings per share. That's it for me. I thank you very much for your attention, and I now leave the floor to Nicolas for the analysis of our activity and results.
Thank you, Valérie, and good morning to all. I will start, as usual, with a quick overview of market conditions to just set the context of this Q2. Clearly, this was another quarter of equity rally based on average data.
The equity markets were up by around 5% in the Q2 compared to Q1 and by 16% on a year-on-year basis. Bond markets were, on the other side, more flattish, but they were up by close to 4% on average year-on-year basis, thanks to lower spreads in the credit markets. So overall, the market effect on our net management fees was positive in Q2. Also, to be noticed that compared to the reference year for our medium-term plan, 2021, we can consider that the market effect is a small neutral with the positive impact from the rise in equity markets offsetting the negative one from higher rates. However, and moving to the next slide, like in the previous quarters, bullish equity markets were not sufficient to alleviate the risk aversion from European investors as regards their investment in mutual funds.
You can see on this data the evolution of flows for the European asset management industry in open-ended funds showed that the activity remained tepid at EUR 128 billion in flows during the Q2, showing a gradual recovery, but still far from the level reached in 2020 or 2021. In addition, these inflows were again driven by passive management on treasury products, to which one must add a return to modestly positive net inflows in active management, mostly thanks to fixed income. If we now move to Amundi, we can see how Amundi performed in this context. Our asset under management at the end of June 2024 reached a new time high at EUR 2,156 billion, which is an increase by 2% compared to on the quarter, on a three-month basis, on 10% over one year.
In both cases, it was achieved thanks to both net inflows and positive market effect. So over 12 months, the market effect totaled almost EUR 142 billion, I think, to be precise. And over the same period, we gathered positive flows totaling EUR 65 billion, despite the headwinds I was mentioning in the European asset management market. And more specifically, on Q2, the netted flows were at a high level, reaching EUR 15 billion. So let's see now where these flows came from. Starting on this slide with a split between medium and long-term assets and treasury products and JVs. As Valérie said, the net inflows were at a high level this quarter in medium-long-term assets, EUR 15 billion.
This was achieved thanks to a high level of activity, in particular thanks to both active management, where we had EUR 8 billion, mostly coming from bonds, and passive management with EUR 6 billion. On the other side, conversely, treasury products posted withdrawals, which are, I would say, usual, seasonal in Q2. This is a period of time when corporates pay their dividends in Europe and their collective profit sharing, and they are cashing out money from money market funds. Moving to the next page, like in the previous quarter, the good level of activity is also related to sustained good performance by our investment teams across the board. As you can see, more than two-thirds of the assets under management in open-ended funds were in the first and second quartiles over one year, three years, and five years, according to Morningstar.
We have more than 250 funds that are rated four or five stars. I will now move to give you more detail about our commercial momentum by client segments, starting with retail. As you can see, total net inflows of more than EUR 2 billion over the years, which was a result of contrasting trends. First of all, and as Valérie mentioned, a very strong performance in third-party distribution with more than EUR 5 billion in the quarter, EUR 12 billion since the beginning of the year, driven by passive and treasury products, but also with active strategies posting net inflows for the second consecutive year after a difficult year 2023 for all the markets due to risk aversion.
On the other side, both French and international partner networks posted some outflows, partially due to redemptions in treasury products in France coming for their corporate clients, as I mentioned, but also, generally speaking, due to the continued risk aversion of their clients and the competition from other saving products. This is particularly the case first in Italy, where, again, a new issue of BTP Valore in May for, I think, EUR 11 billion was again a strong competitor for mutual funds for all players. In France, regulated saving can return this quarter to better yield for traditional life insurance for Euro contracts, which was also a headwind for mutual funds in a market that overall continued to favor capital-guaranteed products, secure products like structured products or traditional life insurance.
But on the other hand, our partner in Spain, Sabadell, continued to post net inflows thanks to the success of our treasury products as well as target maturity fund. And finally, it will be noticed that Amundi BOC confirmed the stabilization of the Chinese market and the attraction of the open-ended mutual fund space in the past months via the JV, with positive flows of EUR 400 million during this quarter. Moving to the institutional clients, they show a stark contrast between long-term assets, where the business was very good, and outflows in treasury products due to seasonal effects. So first, very high net inflows in medium-long-term assets, more than EUR 13 billion in total during the Q3. This was driven by several elements and all client segments, basically.
First of all, a very good seasonal performance for employee savings schemes in France, as the Q2 is traditionally the quarter where our corporate clients issue employee reserve capital increase and pair their collective profit sharing. Second, our partner insurers, Crédit Agricole and Société Générale Assurances, also posted a good level of inflows, unlike the previous quarter, thanks to their return to attractive yields in traditional life portfolios, and therefore the return to positive net subscription from their clients. And finally, we had very good inflows in, I would say, institutional clients, with, in particular, a large mandate, which was of EUR 6 billion, which won during this quarter. So very positive activity in medium-long-term assets.
On the money market side, as I said, net outflows of EUR 20 billion driven by corporates mainly as a cash out from their products to pay their dividend, as usual, I would say, in Q2. Moving now to our joint venture, we can have a look to their commercial performance, which are obviously very positive. Our JVs gathered overall net inflows in Q2 of EUR 12 billion. As I would say, it's not almost usual. This includes a very strong contribution from SBI MF in India, more than EUR 9 billion. And you might recall that we announced at the publication of our first result that we expected a request for proposal to result in possible major outflows from a JV.
This RFP was related to a very large mandate our JVs manage on behalf of a major local pension fund, the Employee Provident Fund Organization, which is the largest pension fund in India. This RFP was, in fact, postponed indefinitely. So, of course, we did not experience any outflows related to this topic. Turning now to the other JVs, they posted also positive flows in South Korea and, I would say, more noticeably in China, where Amundi ABC, like Amundi BOC, confirmed the stabilization of flows thanks to good business level in mutual funds. Moving now to our results and first revenue, what characterized this quarter is, of course, a good level of growth, both for the top line and the bottom line. This is driven by the high level of activity I just described earlier.
To illustrate this, our revenues reached EUR 187 million during this quarter, up by close to 8% compared both to the Q2 of last year and to the Q1 of this year. This was largely driven by the good performance of our net management fees, which were up by 7% on a year-to-year basis. This is due to the rise of our average asset under management of 8%. And we can just notice that this very positive volume effect coming from a market on net inflows was only very partially compensated by the impact of the product mix and hence a very slight margin erosion. Concerning the other revenues, performance fees at EUR 50 million were at the same level compared to the Q2 of last year, but sharply up compared to Q1 of this year.
This is partially due to a seasonal effect and more funds coming to their anniversary date during the Q2, but also clearly due to the good performance of our investment teams I mentioned earlier. Technology revenues were also up by 10% compared to last year with the continued development of Amundi Technology. And finally, our net financial income doubled compared to the Q2 of 2023 thanks to the higher level of interest rates. This very healthy revenue growth was complemented by our good operating efficiency, resulting in positive jaws effects. Clearly, revenues grew more than cost. The increase in cost by around 10% compared to last year results primarily from three elements. First, the first-time consolidation of Alpha Associates since Alpha Associates was integrated at the very beginning of April.
Second, I would say the mechanical impact of the increase in bonuses, which relates to the growth in revenues and operating profit. And third, like the previous year, the accelerated investment in our strategic priorities and, in particular, technology. So if you exclude these elements, the growth in our costs was more or less in line with the cost and taking into account the increase and the impact of the inflation that we observed last year. And we have, indeed, a very positive jaws effect. And as a consequence, our cost-income ratio, which is, of course, at the best-in-class level, decreased to 51.9% during this Q2. So strong growth in revenues, costs that are contained. As a consequence, our operating profit rose by close to 9%. And this is before taking into account the strong contribution from our Asian JVs.
As you can see on this graph, at the end, our total net income reached EUR 350 million, which is up by more than 9% compared to last year. What is important to notice is this growth compared to last year was not caused by performance fees. It was really a consequence of our growth in revenues and cost containment and was, in addition, underpinned by the very strong contribution from our JVs, which is up by 20% compared to last year and reached EUR 33 million. So a new all-time high for their contribution to our net results. Turning now very briefly to the first half of the year, the adjusted net income grew by close to 8% compared to last year and reached EUR 668 million, with trends that are very similar to what we have seen for the quarter.
What is interesting to notice is that this very good growth was achieved despite the decrease by 15% in performance fees compared to last year. Except for this decline, the trends are the same for the first half as for Q2. Healthy revenue growth of close to 6% on a year-on-year basis. Positive geo effect with a further improvement in our cost-income ratio and a strong contribution from our joint ventures with a contribution which is increasing by close to 25% compared to 2023. It must be noticed that these contributions from our Asian JVs are increased by half over the past two years and has more than doubled since 2020. Strong evidence of our successful development in Asia and the strategic relevance of these partnerships.
To conclude on our activity and P&L, the key takeaway from this quarter and from the first half of the year as regards our business activities clearly grows. We were able to achieve this growth at the bottom and at the top line thanks to the growth of our business despite the ongoing pressure on margin in the industry. If we turn to the following page, you can see that our net management fee margin remained almost unchanged compared to last year thanks to the diversification of our business model and our assets by client segments, by asset classes, by geographies. We have been able to keep our margins despite the erosion from the product mix in the context of asset risk aversions. As you can see, Amundi remains very well positioned to grow its business in a profitable way.
I would like to very quickly finish this presentation of our activity and result with a word about our financial structure. I'll be brief because you know this trademark of Amundi. Our balance sheet is more than sound with a tangible equity which keeps growing at close to EUR 4 billion at the end of June. And this is after paying, of course, our 2023 dividend in May, but also after accounting for the full impact of the acquisition of Alpha Associates. So given this element, our excess capital remains in the region of EUR 1 billion available for acquisition if we see opportunities. So I will now leave the floor to Valérie for a few words of conclusion before we can take your questions.
Thank you, Nicolas.
Yes, very briefly, to conclude this presentation, I would say that our diversified profile, our long-term growth drivers, and of course, including the two deals we have signed since the beginning of this year, as well as our high profitability, allow us to remain very confident in our ability to continue to create value for our clients and for our shareholders, of course. So we are now at your disposal to answer your questions.
Thank you, Valérie. Thank you, Nicolas. So we can now start the Q&A. In order to do this, you have to raise your hand. Many of you have already done so. I will just open the mic and you can freely ask your question and any follow-up that you might have. We are starting with Arnaud Giblat from BNP Paribas. Arnaud, you can open your mic.
Hi, good morning. Hopefully, you can hear me.
Yes.
Yes.
Thank you. Three questions, please. Can you give us a bit of an update on the flows at Alpha Associates since you've acquired it? Talk about the product pipeline, potential new client wins you might have had, i.e., selling Alpha Associates to your existing client base, how that development is going for you. My second question is on real estate. I understand that the assets are quite sticky in SCPIs, but given the past performance, could you talk a bit about the risk of redemptions there? And thirdly, I was wondering on the JVs, we've seen a pickup in, if I compute the contribution to profit divided by average AUM, we've seen that pickup quite a bit quarter-on-quarter. I'm wondering if there are any one-offs there or if that increase in profitability is sustainable.
And if I may end with a request, going forward, would you mind providing annual contract value metrics for Alto? That's the run rate revenues. I think it'd be quite helpful to understand the development there given the lumpiness in revenues. Thank you.
Okay. Thank you very much, Arnaud. We have a sort of an echo.
Arnaud, if you can mute your mic. I think it's coming from you. Yes, thank you.
Yes, thank you so much. Nicolas, can I let you update on the flow of Alpha Associates because I don't have them with me? But what I can tell you before the figures, if Nicolas has them, is that the workshop, which has been organized with both the distribution team and the institutional teams, has been very positive on all sides. The culture is really, I mean, the people are fitting well. The dynamism is really here.
The team of Alpha was presenting to all their capacities to all our clients during the Amundi World Investment Forum. I heard we have a few deals in the pipelines already. On my side, I'm really happy about that. Nicolas, do you have them?
Not much to add on the quarters. There was no significant flow just on the quarter of April, but indeed a strong pipeline, good connection with the team. Hopefully, both probably first on the insurance side, but at the same time, we're also working on, I would say, retail and wealth solutions. It will deliver in the coming quarters.
On the real estate side, as you could see, months after months, the outflows have been real, but not so important, actually. Why? Because considering the situation and the market, et cetera. Why?
Because it's a bold product that our clients and retail clients buy for the long run for getting revenues out of them, and they still get these revenues from all our solutions. So no significant change on that front. The only one I can see, actually, is the fact that the ECB has started cutting the rates, and that's, as you know, a potential good sign for the future. And we, I hope, could see some stabilization in this real estate market in the next few months. On the JVs, Nicolas, you have an answer?
Yes, of course. No specific one-off in the contribution from the JVs, mainly driven by the development of activity and the growth in management revenues and marginally from financial revenues at the level of the joint ventures, but no specific one-offs.
On your request, Arnaud, on the annual contract value of revenues for Alto, I think it's a very good idea. It will help you to show the fact that the recurring revenues of Amundi Technology are growing. So let's take that into consideration. I'm looking at Cyril for next quarter.
Okay, thank you. The next question is from Hubert from Bank of America.
Hi, good morning. Thanks for taking my questions. I've got three of them. Firstly, on the French networks, it seems like this quarter is starting to see outflows coming from there. I know you mentioned the Livret A and traditional insurance products coming back in vogue. Should we expect outflows then to continue for this network and more pressure in the coming quarters? That's the first question. The second question is on the third party. So thank you for the information earlier in the presentation.
In terms of the flows or the products into third party, it seems like it's mainly passives. I know there's some active as well, but it's predominantly passives, as we've seen in the past. Is this because of the mix of clients you have? And also, can you talk about the blended fee margin in this channel? Is it similar to the rest of the retail network or different from that? And lastly, on Spain, can you tell us how many assets you have in Spain today? I know you mentioned that Sabadell was good, but if BBVA, if it takes over Sabadell, would you lose this distribution channel going forward? And if so, what's your strategy for Spain going forward then? Would you need a new network and new distribution there? Thank you.
Thank you very much, Hubert, for your question.
So on the French networks, as Nicolas very well explained, I mean, there is obviously a competition from the bank. There is a competition from the life insurers on the Euro contract, which was delivering more recently than previously. So we've seen that. But honestly, and also maybe on Q2, there is, as usual, an effect on the corporate clients from the French networks. You know that we are covering some corporate clients from the French networks as well. And that's the time where they pay their dividends. So there is always a money market negative effect in Q2, which we can see as well. But I have absolutely no reason to be worried for the future on our French networks. And we are actually working with Crédit Agricole to push more the saving solutions within the network. So no worries on that front.
On the third-party distribution, I don't have the figures with me. It's true that I see it on the screen. Maybe Nicolas will comment again, but it's absolutely true that, and it's not at all linked to Amundi. It's a market trend that you've seen when you look at the flows over the last few months and even years. That is that the passive solutions are growing faster than the active solutions within distribution networks. There are more and more discretionary portfolio management through ETFs which are implemented in the network. I think actually it's a very strong strength of Amundi. I mean, being the leader of the European leader in the ETF space and a very strong player in that area is actually a big plus when we compare ourselves to other competitors which are only able to do and to propose to distributors active management.
The fact to be able to propose both and to be able to propose services in addition to that is a great strength for us and makes us closer and closer to all these third-party distributors. The last question about BBVA and Sabadell and Spain. I mean, first of all, Sabadell is doing very well. Second, just for you to know, BBVA is also one of our very large clients and we're doing very well with them as well. Third, I mean, in the agreement with Sabadell, like all the agreements we signed, it is very protective of Amundi in case of an M&A operation. Of course, we think about that when we think about it when we sign it. So I have absolutely no worries according to the situation today in Spain.
Okay, thank you. The next question comes from Isabel. Isabel, you can unmute your line.
Hi, thanks for taking my questions. I also have three, please. First, going back to the French network, can you just provide some color on how client sentiment and engagement developed during the quarter and into the start of July? Particularly, did you see any adverse impacts from the uncertainty of the European and French elections, please? My second question is on third-party flows. What regions and type of distributors were particularly contributing here? You mentioned digital, like online distributors in your remarks earlier. Has this flow momentum continued into Q3 so far? Finally, on the Bank of China JV, should we really see this now as a point of recovery? How would you expect flow momentum to develop into the second half?
Should we expect just continued slight inflows, or do you expect an acceleration? Thank you.
On the French networks, we have, of course, monitored the situation and honestly seen absolutely nothing specific following the French elections. So absolutely nothing significant happened linked to these events. Second point, on third-party flows, what I can tell you, I hope Nicolas has some details in front of him, but what I can tell you is that they are very diversified. I mean, the team is covering retail banks, wealth managers, private banks, of course, life insurers. So it really comes from a vast and diversified range of clients, whether in Europe or in Asia. What I could tell you is that we managed this year to, I think it was, by the way, probably signed at the end of last year, very strong agreements with big institutions.
StanChart is a very good example because they are working in 13 countries in Asia, and we managed to implement solutions for them in all these countries at the same time. The fact that we are very global and that we are in the capacity to deliver this service in so many countries at the same time is for sure a big plus of Amundi and our network, and it helps us. Size matters and the capacity to implement matters for distribution networks, and it is a big plus. On the specific case of the digital platforms, I wanted to stress it because, as you know, in the banking industry and in the financial industry, total digital distribution platforms are growing everywhere, faster in some countries or regions than others. But now we can see that it is growing absolutely everywhere.
We have a dedicated team within Amundi who are covering these platforms because they do require a service which is different. They want very simple solutions, very easy to deliver in a digital way. We are covering more and more of these platforms or digital banks everywhere in Europe and in Asia. It is, we know it, a source of growth for the future for Amundi, so that's good news. On the last question on Bank of China JV, what we see is that the market globally in China, as I was mentioning in the mutual funds, is stabilizing, which is good news. Looking at what is happening in our JV, we really see a new, I would say, positive trends arising.
I do not want to, of course, imagine the future that I don't know, but the situation looks really better than it was a few months ago.
Okay, thank you. The next question comes from Angeliki Bairaktari from J.P. Morgan. Angeliki?
Good morning. It's Angeliki Bairaktari from J.P. Morgan. Thank you for taking my questions. First of all, how should we think about the revenues coming from Amundi Technology? You had EUR 35 million in the first half, but we're still far from the EUR 150 million annual revenue target that you had set for 2025. Have you considered accelerating the growth in that segment through acquisitions? Then secondly, how should we think about cost growth in the second half? Is Q2 that includes now the Alpha Associates impact a good run rate for the second half of the year? And last question on passive.
If we compare your passive flows to those of your closest European peer in the first half, you seem to have lost some market share despite the fact that you are number two in ETFs in Europe in terms of the AUM stock. Can you explain the dynamics in passive? And do you think it may have to do with the fact that retail penetration in France and Italy is perhaps lower relative to Germany, or is there something else going on there? Thank you.
Well, thank you very much. On Amundi Technology, if we found, of course, an opportunity of acquisition that seems reasonable, which would help us to accelerate our growth and which obviously would have a nice return on investment, we would go for it for sure. It's one of our strategic growth perspectives. We have a good team, good solutions, and we want to accelerate.
So that's potentially yes if we were finding something. On the trend for the second semester, what do we see today? First, we've seen, and you see that much better than I do, some disappointments in the result season. So we would probably see a little correction. We're seeing a little correction on the equity markets, which seems absolutely normal when you look at the global picture. But the markets are still very high compared to what they were one year ago. So no worries on that side. The good news could come from the fact that the rates start to be cut, which should help our clients to go back to some more riskier solutions. It will come step by step. I'm not able to tell you whether it will be Q3, Q4, or the beginning of 2025, but the trend should be this one.
More than everything, what I would like to say, speaking about the trends and the flows, etc., is the fact that what I think we managed to show you is that whatever the context around us, even in contexts where there is really a low appetite for risks from our clients, we are able to deliver them solutions which are really fitting their needs because at the end of the day, economic growth means more savings. Aging of populations means more retirement needs. So flows are coming in. And the key is to be able for us to deliver the right solutions to our clients wherever they are and whatever the context and whatever their risk appetite is. So that's why I'm so confident on the fact that we will go on bringing growth in the future.
Speaking about passive, as you know, I mean, we just finalized the fine-tuning of the range of products following Lyxor integration. It has taken a little bit of time to the teams, which is normal. But despite that, I mean, they managed to raise a lot of flows, whereas they had this work to do in parallel. It's completely over now. So they will get back more time on that, more time for developing, more time for launching new products. It's true as well, and you are right, that France and Italy are obviously not the most important countries in terms of ETF developments, and especially compared to Germany.
But we are, as you know, very present in Germany, and we are obviously benefiting from the growth of the ETF market in Germany, but not only in Germany, actually, in all countries in Europe and even in Asia, because you probably know that UCITS ETFs in Asia have a tax advantage for clients, and we are able to sell them there as well. So I'm really very confident for the growth of our business line for the future.
Thank you, Valérie. The next question will come from Nicholas Herman from Citigroup. But ladies and gentlemen, we would very much like to see you face to face. If you could open your camera when you ask your questions at least, that would be very much appreciated. Nicholas, your line is muted.
Many thanks. Apologies. I'm actually calling through a remote computer so I will not be able to turn my camera on. Apologies for that. I will try to get out of it. I'll do it through a different mechanism next time. Hopefully, you can hear me okay. Just three questions from me, please. Firstly, on client demand, I guess, firstly, multi-asset demand, multi-assets has been depressed in recent times. Encouraging to see the large multi-asset mandate. But if I exclude that, it seems like the rest of the multi-asset flows continue to be weak. So I guess just, do you see this large mandate as a sign that sentiment could, at the margin, be warming to multi-asset, or is this just more of a one-off, so to speak? And I guess just more broadly, clients remain risk-averse. That much is clear.
But in terms of your dialogue with investors, are you seeing any, excluding your clients, are you seeing a shift in preferences and asset demand? That's the first one. Secondly, to follow up on the M&A question, just curious, how do you see the M&A pipeline today? And then finally, on fee margins, could you please disaggregate the fee margin movement for me, please, over, let's say, six months or 12 months between margin pressure, mix effects, and market levels? That'd be very helpful. Thank you.
Nicolas, you want to go for it?
So on the first part, on multi-asset, indeed, the mandate we won was a multi-asset mandate. And probably, if you look at the asset class overall, you need to distinguish between retail and institutional clients. Institutional clients with developed OCIO activities is something which remains very positive.
On the retail side, it's really linked to what you are saying about the risk aversion that affected flows in equities and in multi-asset very strongly. So for the moment, we haven't seen any recovery for now. But with a possible decrease in risk aversion, with a possible movement in short-term interest rates, we would expect risk appetite to come back, appetite for long-term products to come back, and it would impact multi-asset flows. Regarding fee margins, as you know, we have a very diversified business model in terms of geographies, products, expertise, client base. So the blended margin for the group is a consequence of this various development.
What we have seen, sorry, what we have seen over the last two years and slightly continuing is more appetite for money market funds, fixed income products, simple structured products, so products with lower margin and less appetite, especially on the retail side, as we discussed on equities and multi-assets. So it has been, as for, I think, all the industry, impacted negatively our asset mix. But it has been largely compensated, not totally, but compensated by other developments in terms of client mix with retail that continue to post the positive flows. And also by the fact that our development in Asia, for example, in other geographies in the U.S. over the last months compensated for basically lower demand in higher margin products in Europe. On M&A, you?
And I think there was, I'm not sure I understood the question, but I understood M&A pipeline. Pipeline, yes.
What does it look like?
I mean, I will give you the usual answer. First of all, we have, as you could see, we have been active, and we are really spending a lot of time, both Nicolas and myself, to look at any potential file which would be interesting to accelerate the growth of Amundi, whether it's a distribution deal or whether it's an expertise deal or whether it is a technology deal. So the first answer I'm going to make is that we spend time, of course, looking at them. And then, as usual, it's a question of the good opportunity at the good time for the good price. And we stick to our strategy, which is to really look at files when only it can accelerate our strategy. And second, with a return on investment, which is over 10%.
So with our capital, which is free today, I'm confident that we will find other operations in the future.
Thank you, Valérie. The next question will come from Bruce Hamilton from Morgan Stanley. Bruce, your line is unmuted.
Hi there. Can you hear me? I'm trying to put my camera. You might be able to see me as well. There we are. Hi. Thanks for the presentation and all the Q&A. Very helpful. I had actually maybe three questions. Sorry to be boring. First one, just going back to the strong growth in the third-party business, is there any revenue margin implication from that? I think you were asked, but I'm not sure we got an answer.
So are the margins within retail the same across the networks and third-party, or could we actually see an improving trend within retail to the extent that you continue growing more strongly in third-party? That's the first question. Second question on the sort of passive ETF business. Obviously, industry-wide, there's quite a lot of focus on innovation around active ETFs. Is that something you're strongly focused on? I guess it's more of a U.S. trend given the tax advantage, but given your comment on Asia, maybe that's an opportunity or as a way to express thematic views, for example. And then final question on Victory. Valérie, I think you mentioned U.S. products sold into Asia. I'm just interested, when you think about the sort of revenue upside case, the revenue synergy opportunity, is there a particular area?
Is it sort of U.S. products sold into Asia that's the most interesting, or is it a balance of European product into U.S. distribution? How should we think about the sort of revenue opportunity? Thank you.
Thank you very much. I will take the active ETF and the Victory question, and then Nicolas, I will let you come back to third-party revenue implication. On the active ETF side, you're absolutely right. It's very much an American trend. Why? Because, as you know, in the ETF space, in the U.S., there is a tax advantage linked to the ETF envelope, which is very important and which was the very beginning of the success of the ETF market. This tax advantage is not present in Europe or in Asia, so that makes a big difference. So what's going on today? First of all, with Victory, I'm making a link.
We will benefit from that because if you remember, I mean, they are manufacturing active ETFs themselves. And on our side, we consider that today in Europe and Asia, the market is not significant enough, but of course, we have more than the capacity to deliver this kind of solution if it was growing really in Europe. So we're just waiting for the right time if it comes. On the Victory solutions versus Asia, what I wanted to say is that our Asian friends, Asian investors globally, when they invest, first of all, and above all, they invest locally. First of all, in their own country. This is for either history reasons or regulatory reasons. It's still very frequent. So typically in India, in China, in this huge pool of savings, I mean, the savings are obviously invested locally.
So there is very little money coming, I mean, investment going outside of the country. But still, in some of these countries, there is a more flexible regulation which allows the clients to invest abroad. In that case, of course, that's where we come with all our expertise coming from all over the world. Obviously, the starting point is very often American expertise. They start buying American stocks before buying European ones for cultural and history reasons. That's why it was so important for us, because this Asian clientele is really growing for Amundi to be able to offer them a very large pool of American solutions. Of course, it's in addition to our other solutions, the European and emerging ones, but for them, it's above all American solutions. That's the reason why we always link the Victory deal to our efficiency in Asia.
Coming back to the margin question, in fact, the margins for similar products between the various retail channels are very similar, meaning that the margin for active management, whether we sell it to third-party distributors or partner networks, are very similar. So if there is a difference, there is a difference in average margins between third-party and networks. It's just because the mix in terms of passive versus active management is different. But for same products, same margins, basically.
And often, I mean, we have a lot of solutions which are actually distributed both with our third-party distributors and into our retail network partners. So by definition, same price.
Okay. Thank you, Bruce. So we can move now to Jacques-Henri from Kepler Cheuvreux. Jacques-Henri.
Yes. Good morning, everyone. Quick question on the earnings, because it's something that you get asked when quarters are not that great.
So I'm going to ask you when quarters are good. If I annualize your net profit, you get to EUR 1.33 billion annualized. Your target, more or less, would hint at EUR 1.4 billion. It really looks doable now. So can we consider the quarter more as a pivot quarter where all the efforts you've done to actually keep and build the franchise over the last, since you started your tenure about two and a half, three years ago, are really going to start to really deliver in a constructive market? And do you feel comfortable that now is the moment, more or less? Thank you.
As you're on. Clearly, the target we gave for 2024 is doable, and we are very committed to the target. 2025. That's 25, yes. 2025, which was, as you recall, the objective was between 2021 and 2025 to have an average growth of the net result by 5%, excluding market effect. And indeed, now, today, the market effect is more or less neutral between 2021 and 2024. So you can see that we are clearly in line to deliver on the plan.
One last question, if I may. Your stock of excess capital? Oh, sorry. Thank you, Cyril. Just one last question, sorry that I forgot. Your stock of excess capital, maybe, at the end of the quarter, if you can give that? Okay. Did you hear me?
Yes. Yes. EUR 1 billion.
Oh, EUR 1 billion. Sorry. Thank you.
Thank you, Jacques-Henri. The next question is from Sharath Kumar from Deutsche Bank. Sharath, the floor is yours. No, it doesn't seem to be working.
Maybe you can switch to Mike in waiting for him.
Yes, maybe we switch to Mike, just waiting for Sharath to be able to reactivate. Mike Werner from UBS. Mike, the floor is yours. Nope. Maybe it's because Jacques-Henri is still on.
Can you hear me?
Go ahead.
Excellent. Sorry, just one question, please. And apologies if it was asked before in some of the earlier bits. But we saw cost growth. I know you explained what's driving the incremental cost growth in Q2, and that was extremely helpful. But we saw that growth accelerate from 3% in Q1 to 7% in Q2. And I think really the one big difference is the consolidation of Alpha. Is this kind of the growth rate that we should anticipate in the second half of this year, or how should we think about that in terms of second-half cost growth? Thank you.
One point, I will let Nicolas complete, but one point, in addition to Alpha, of course, but we have the revenues on the other side. What is really important for us is to make sure, and I always told you that we have this capacity to monitor our costs, is that we make sure that when we see that the revenues are growing and we have tailwinds, we benefit from that position and period to invest a little bit more, which was the case typically in a reasonable way, but on the technology for this quarter. The other thing, which is obvious, as you know well, is that when our profits are growing, by definition, the provision we make for bonus pool are growing mathematically. So it's part of the explanation as well.
Yeah, I just wanted to add that. If you compare, for example, the Q1 and Q2, the increase in cost, at least half of it is explained by just this mechanical effect, higher provisioning of variable remunerations due to higher revenues. So be sure that we keep costs under strict control, and we adapt also our cost planning to the evolution of revenues and profit, and we stick to the guidance, which is to keep the cost-income ratio below 53%.
One last point, which is good news for everybody, not only for Amundi, but is the fact that inflation is clearly decreasing everywhere in the world, not only in Europe. So anywhere, I mean, this is obviously a better environment, even better environment for us for the future.
Thank you, Mike. So we'll try again, Sharath. And sorry for the technical glitch, but made it impossible to hear you. Sharath, can you hear us and talk now? No, still not. Seems to be a problem on your side. Okay, I'll call you after the conference. There doesn't seem to be any other question, any follow-up, or any second thought about any question? No? So thank you very much, and I leave the floor now to Valérie and Nicolas for the concluding remarks.
No, thank you very much, really. Thank you for being with us today. We obviously, as you could see and understand, are very confident for the future growth of Amundi linked to all these growth levers we have, and I think also organic discipline we have, which is one of our DNA trademarks. I really wish you all a very good summertime. We all deserved it, and definitely you probably deserved it as well. And also good games.
If you are interested in sports, we will look at it for sure on our side. Thank you very much. See you soon.
Thank you.