The potential tie-up between Natixis Investment Managers and Generali Investments, creating a €1.9 trillion ($1.95 trillion) money manager, improves the strategic options for both parent companies, but it will come with challenges, Fitch Ratings said.

With €1.9tn in AUM, the joint venture would allow the pair to expand globally and speed up a push into private markets.

Under the terms of the tie-up, BPCE and Generali Investments will combine their asset management operations in a 50-50 joint venture, people familiar with the situation said. A non-binding preliminary agreement could be reached as early as next week. It would still need to be approved by the relevant unions and authorities.

Assicurazioni Generali SpA and Natixis SA are close to a deal for a joint venture in asset management to cut costs and team up on distribution, according to people familiar with the matter.

PRESS RELEASE BPCE and Generali to Create the Largest Asset Manager in Europe by revenues and a Major Player Worldwide Milan & Paris, 2125 – Assicurazioni Generali S.p.A. (“Generali”) and BPCE today announce that they have signed a non-binding Memorandum of Understanding (“MoU”) to create a joint venture between their respective asset management operations Generali Investments Holding (“GIH”)1 and Natixis Investment Managers (“Natixis IM”).

Italy's Generali and France's BPCE said on Tuesday they had taken the first step towards creating Europe's largest asset manager by revenue as the industry bets on size to protect profit margins. The