It is time that we turn our attention to France – for many reasons. With over 32 billion EURO, France is the second largest hedge fund center in Europe. Already in the 90s, there was (and still is) a strong CTA community, with some players already reaching one billion assets then.
Another peculiarity is the skill factor – France produces some of the best graduates through its
universities. Most global banks employ large numbers of French professionals, often in very senior positions. The graduates have a good mathematical and scientific background, which is an excellent base for statistical, systematic trading and risk management. We could almost argue that the French love models and investments based on models, and are less comfortable with discretionary investments. These propensities also determine the make-up of the French asset management industry.
But being based in Paris, the City of Lights, can also have a downside. Says one manager: “We are 300 kilometers away from London, but we could be 10,000 kilometers away from London. People from Geneva never go to Paris with the exception of a few romantic weekends with their partner or spouse. It is really funny, when you try to set up a meeting with someone, you have to target either Friday or Monday...”
But UCITS III (and UCITS IV) have turned things around – substantially. There are over 100 asset management companies active in the country, and many of them report a surge of visitors who come and “shop” for superior UCITS 3 products.
The Roundtable also comes with a couple of warnings. A lot of people, especially non Europeans, assume that the UCITS 3 format is homogeneous in Europe, whereas in practice this is not the case. For example, there are huge differences between a Luxembourg or Ireland and a France based UCITS III fund. There were issues for both Luxemburg and Ireland domiciled funds related to Madoff and Lehman, and this Roundtable elaborates on the superior regulation on the manager and the security of the funds and investments within the French framework, which with the new “Fond Contractuel” framework has become flexible and interesting enough to compete even on a global scale.
We also examine why the French fund of funds largely outperformed their international peers, the pros and cons of UCITS generally, and what to do with non-UCITsable hedge fund strategies.
This Roundtable was sponsored by Gide Loyrette Nouel (www.gide.com) and took place in November 2009 at their Paris office with:
Christian Bartholin, Managing Director and Secretary General, HDF Finance
Nathanaël Benzaken, Managing Director, Lyxor
Denis Beaudoin, CEO, Finaltis
Géraud Dambrine, Directeur Général, Lombard Odier France
Laurent Dupeyron, CEO – Président, Olympia Capital Management
Manuel Kalbreier, Partner, Boussard & Gavaudan
Xavier Lépine, Chairman, UFG Group
David Malamed, Partner, Gide Loyrette Nouel
Olivier Neau, Chairman of the Executive Committee, Edmond de Rothschild Investment Managers
Stéphane Puel, Partner, Gide Loyrette Nouel
Sophie van Straelen, Founder and Managing Director, Asterias Ltd
Thaddée Tyl, CEO, Rivoli Fund Management
Enjoy “listening in” to the Opalesque France Roundtable!
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