French bank Societe Generale has signed a joint venture with US investor AllianceBernstein to bolster its equity research, trading and capital markets unit.
The two groups have launched a joint venture that will combine their equity research and cash equities trading unit, according to a statement, which will also boost SocGen’s equity capital markets and prime services divisions.
It is a major move under Slawomir Krupa, the head of SocGen’s investment bank who is set to become its chief executive next year. The deal sees SocGen take a 51% stake in the venture, with an option to own outright after five years.
READ Societe Generale names investment bank boss Krupa as next CEO
“This partnership with one of the most recognised firms in research and cash equities, combined with our global leadership in equity derivatives, would create an undisputed leader across the equity business for the benefit of our issuer and investor clients,” Krupa said in a statement.
As equity research houses have consolidated after the introduction of MiFID II in 2018, which requires banks to charge separately for research, AllianceBernstein has been expanding. In April 2019, it completed the acquisition of independent research firm Autonomous Research.
The move is part of SocGen’s push to diversify its investment bank away from its reliance on its leading equity derivatives franchise. The equities sector is also a focus for large French banks, with rival BNP Paribas taking over its equities joint venture with Exane last year.
The new venture will be headed by Robert van Brugge, who is currently chief executive of Bernstein Research Services. Stephane Loiseau, who runs SocGen’s cash equities business, will become deputy CEO.
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