STRATEGY FOR SEEDING THE NEW GENERATION OF INNOVATIVE EMERGING ASSET MANAGERS

Transcription

1 STRATEGY FOR SEEDING THE NEW GENERATION OF INNOVATIVE EMERGING ASSET MANAGERS Alain LECLAIR, Chairman, Emergence International July 4 th,

2 PRESENTATION OF THE ROUND TABLE STRATEGY FOR SEEDING THE NEW GENERATION OF INNOVATIVE EMERGING ASSET MANAGERS INTRODUCTION: Alain LECLAIR, Chairman, Emergence SPEAKERS : Jean-Philippe BOUCHAUD, Chairman, Capital Fund Management Fabrice DUMONTEIL, CEO, Eiffel Investment Group Lionel MELKA, Chief Investment Officer & Co-Founder, Bernheim, Dreyfus &Co Philippe PAQUET, Deputy CEO, NewAlpha Asset Management 2

3 PARIS FUND INDUSTRY: LEADER IN EUROPE AND WORLDWIDE 600 PARIS-BASED ASSET MANAGEMENT COMPANIES A permanent growing number : an average of +40 per year 4 ASSET MANAGERS IN THE TOP 20 GLOBAL RANKING BILLION EUROS UNDER MANAGEMENT NUMBER ONE CENTER FOR FUND MANAGEMENT IN EUROPE (20%)and number two globally (behind the USA) Funds Financial Management* Industry in Europe EUR bn at end December 2011 France 19,6% Germany 19,1% Ireland 0,3% Luxemburg 0,5% Spain 2,0% Sweden 2,3% Belgium 2,5% Italy 4,8% Switzerland 7,5% Others 10,3% * Assets domiciliated in Luxemburg and Irland reallocated to promoter s country of origin AFG estimates USA 13,3% UK 17,8% Source: EFAMA, AFG, CSSF, IFIA

4 A COMPLEX ENVIRONMENT CREATING OPPORTUNITIES FOR THE ASSET MANAGERS CREATING NEW ACTORS: A LEADING BENCHMARK FOR DYNAMIC AND INNOVATIVE MARKET PLACES Paris is in Europe the leading place for independent Asset Management Companies International recognition of the French managers very high level of professional expertise Top education and research of the French University and Business Schools, especially in the quantitative area FOR THE FINANCIAL MARKETS AN INCREASING ROLE OF THE MARKETS TO FINANCE THE EUROPEAN ECONOMY Reinforced regulations which restrict classical banking schemes (Basel III, Solvency II, Dodd-Frank) Large pool of individual and institutional savings New asset classes : environment, energy, health FOR THE INVESTORS EMERGING CONCEPT MEETS AN INCREASING INTEREST OF GLOBAL INVESTORS New source of performance for investors Historical development in the U.S.A. via pension funds, endowment Recent developments in Europe and emerging financial places 4

5 STRONG FRENCH ENTREPRENEURIAL DYNAMICS 400 INDEPENDENT ASSET MANAGEMENT COMPANIES 150 created over the past 5 years SOME HAVING REACHED A EUROPEAN & INTERNATIONAL SIZE A permanent growing number of management companies in France HURDLES TO REACH THE 100 MILLIONS EURO UNDER MANAGEMENT THRESHOLD Too little seed-money in Paris Institutional constraints: level of participation, track-record critical mass phenomena : global investors are avert to funds with low assets under management Marketing and sales often need to be scaled up Number of companies Gross Number of companies created Breakdown of independent management companies in France by assets under management Source: AMF Source: AFG 2010 Growth of emerging asset managers is a key objective for the Paris Fund Industry 5 Source: AMF

6 A SHIFT IN FINANCING THE EUROPEAN ECONOMY EUROPEAN FINANCING STRUCTURE USA FINANCING STRUCTURE Consequences of Basel III and Solvency II Rebalancing of banking versus market financing An increasing role of third party asset management TOWARDS A NEW EQUILIBRIUM OF THE FINANCING SCHEME New constraints in investment banking activities Many experienced and talented professionals have already moved out of their Groups to launch their own asset management company * Non bank financial intermediation 6

7 SEEDING PERFECTLY MATCH INVESTORS AND MANAGERS INTERESTS (1/2) BENEFITS FOR THE HAPPY FEW : TO PROVIDE SEED MONEY TO THE MOST PROMISING AND INNOVATIVE INVESTMENT FUNDS, managed by newly created French or International Asset Managers, incorporated in France Detect Analyse Select Promote EMERGENCE : 30 MILLION EUROS AVERAGE INVESTMENT PER SEEDED FUND 7

8 SEEDING PERFECTLY MATCH INVESTORS AND MANAGERS INTERESTS (2/2) BENEFITS FOR INVESTORS : AN EFFICIENT SCREENING TOOL 100+ applications Stringent selection by the Fund advisor, NewAlpah AM A SECURED FRAMEWORK TO SEED AND MONITOR EMERGING ASSET MANAGERS Follow-up of seeded funds and managers Strong risk management of seeded funds A KEY ROLE OF THE INVESTORS IN THE GOVERNANCE AND MONITORING OF THE FUND Veto power of the Investment Comity Conflict of interests are strictly managed OPTIMIZED REGULATORY SOLVENCY II S CONSTRAINTS Transparization of the portfolio (look-through) A DOUBLE SOURCE OF REVENUES The performance of the incubated funds (3 year seeding period) Fee-sharing from seeded managers (overall 7 year period) 8

9 THE EMERGENCE FUND AN UMBRELLA CONTRACTUAL FUND A regulated tailor-made structure LARGE FRENCH AND INTERNATIONAL INVESTORS Board : Aviva, BNP Paribas Cardif, CAVP, CDC, CNP, Macif Gestion, UMR in the process of being enlarged, headed by Alain LELCLAIR INNOVATIVE INVESTORS GOVERNANCE TO PARTICIPATE to seeded managers selection Investment Committee headed by Jean-Tristan PARODI, CDC INNOVATIVE FEE-SHARING SCHEMES between EMERGENCE Fund and the seeded asset managers 30 M seed-money per investment for 3 years fee sharing for 7 years TARGETED ASSETS: MILLION EUROS for the first sub-fund (final closing 3Q12) THE FIRST SUBFUND : ABSOLUTE RETURN managed by NewAlpha AM OTHER SUBFUNDS UNDER STUDY LEGAL FRAMEWORK DESIGNED WITH GIDE LOYRETTE NOUEL AND PWC SELLAM 9

10 Overview NEWALPHA AM : THE MANAGER OF THE FIRST SUB-FUND Investment management company regulated by France s Autorité des Marchés Financiers (AMF) More than 1,500 seeding projects analyzed - 19 seeding partnerships with early stage managers $720 million in cumulative seeding investments $3 billion managed by currently partnering managers 10 professionals averaging 16 years experience NewAlpha has been awarded several times for detecting and seeding talented emerging managers Voted Best Seeding Platform in 2010 and 2011 by Hedge Funds Review Best Performing Specialist FoHF Over 3 years Award in 2011 (HFR European FoHF Awards) Best Long / Short Europe fund in 2010 (HedgeWeek) and 2011 (EuroHedge) for Melchior European NewAlpha Genesis 3 has been nominated in two categories for the World Finance 2012 Awards : Most innovative FoHF Europe and Best Seeding FoHF Europe 10

11 TYPOLOGY OF APPLICATIONS RECEIVED FOR THE SUBFUND ABSOLUTE RETURN BY INVESTMENT STRATEGY TYPE Other (6%) Volatility Arb (7%) Multi-Strategy (8%) Europe (26%) Managed Futures (6%) Global (63%) Global Macro (23%) Fixed Income (9%) Event Driven (11%) L/S Equity (31%) USA (7%) Emerging (3%) Asie (1%) BY ASSETS UNDER MANAGEMENT 11

12 CONTACTS CONTACTS EMERGENCE Alain LECLAIR, Président d Emergence / a.leclair@emergence-incubation.com Anaële COJAN-BAUDANT, Secrétaire générale d Emergence / acb@emergence-incubation.org CONTACTS NEWALPHA AM Antoine ROLLAND, Président de NewAlpha AM arolland@newalpha.net Philippe PAQUET, Directeur Général en charge du Développement de NewAlpha AM / ppaquet@newalpha.net Clarisse ANGER, Directeur de la clientèle institutionnelle, NewAlpha AM / canger@newalpha.net CONTACTS FINANCE INNOVATION Arnaud de BRESSON, Délégué général, Paris EUROPLACE, Directeur général FINANCE INNNOVATION bresson@paris-europlace.com 12