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Loic Fery Matthias Knab, Opalesque for New Managers: Fifteen years after Loic Fery first sat down with Opalesque.TV, the founder and CEO of Chenavari Investment Managers returned for a wide-ranging conversation with Opalesque's Matthias Knab. The European alternative credit specialist turned 18 earlier this year, and Fery - one of the most distinctive figures in European alternative credit - reflected with unusual candor on what he got right, what he would do differently, and the philosophy that has carried the firm through the Eurozone crisis, Brexit, COVID, the 2022 gilt crisis and the Ukraine shock.
Bigger than the day-one plan
Asked what surprised him most since the early days, Fery's answer was disarmingly simple: the outcome exceeded the ambition. "When you start your fund, you are ambitious of course, but to be honest, we have achieved a lot of things that I had not thought about when we started, both in terms of performance numbers and in terms of scale," he said. "The way things have turned out is actually better than what I initially was hoping for." The initial ideal outcome, he recalled, was "a stable investment firm, good performance, and maybe one or two billion under management."
But when Knab reflected this back as "success," Fery pushed back immediately - and the pushback is perhaps the most revealing moment of the conversation.
"I would never use the word success," he said. "Success is a very relative word. We can congratulate ourselves and say we've done well, but there is nothing more important than the next day of performance, the next month, the next year of performance. That's what defines an alternative asset manager."
Eighteen years in, he insists, the hunger is intact: "Some people lose the drive and decide to retire early. Chenavari remains full of top people who remain passionate about investing, and we're still very demanding on ourselves and on the teams. The firm is 18 years old, but there's a lot of energy, and we feel that we haven't fully achieved what we now think we can achieve. I believe we are better than we have ever been, as the experience of these past 18 years of existence is a huge edge for Chenavari."
The growth lesson: Say no more often - and to the right things
The most valuable insight for emerging and mid-sized managers may be Fery's answer to what he would tell his younger self. Starting small, he said, "was a gift," because it forced an obsessive focus on performance. The challenge came later, when asset growth kicked in.
"There has been a time when we received lots of inflows and the way we answered was by adding different investment strategies that were maybe a bit peripheral to our core skill set," he admitted. "If there was one thing I would manage differently, I would probably say "no" more often to when it comes to investing additional assets in new strategies. In retrospect, we decided to cap AUM in strategies that were core to our DNA and expertise - like structured credit and specialty finance - while we onboarded other strategies that were more peripheral. We should maybe have done it the other way around: accept to slowly take more assets in the strategies that were core to us and refrain from diversification outside our core skills."
He was specific about the detours: "At some point, because we had a significant growth of assets, we started an Asian direct lending activity - that in particular is the one I wish we would not have pursued." The firm ultimately went back to basics and came back to focus on what it became known for. "We are a European alternative fixed income specialist. We navigate the opportunity set around that market, from very liquid credit such as credit derivatives to illiquid private credit which sometimes leads us to own specialty finance credit originators. All is about one similar theme: the understanding of fundamentals in credit in Europe - and applying the best structuring and enhancement to it, through structured credit, securitization, and other sophisticated ways of playing the credit markets."
It is a striking admission in an industry where diversification is usually presented as an unqualified good. Fery's version of the story inverts the conventional wisdom: capacity discipline is essential, but it must be applied to the periphery, not necessarily to the core.
The humility doctrine
Pressed on whether there is an underlying Chenavari philosophy, spoken or unspoken, Fery offered a two-part answer: expertise and humility.
"The philosophy is to be an expert in where you invest - then you're in a better position to spot what would be the good investments and how to best structure them," he said. "But it is also to retain a form of humility, because there is no better investor than an investor who knows that there might be a reason why this investment is going to fail. Spot it early, act decisively. Be expert in your field, be confident in your ability to deliver performance, but keep that humility that otherwise might put you in trouble."
That discipline is operationalized through what amounts to a pre-mortem and post-mortem culture: "When you do a deal, try to identify, before you do the deal, the reasons that could make this deal not a good deal. And then the post-mortem approach: you've done a deal, this happened - did you miss anything? The more you do this on a constant basis along the years, the better and the more consistent you become."
What gets a firm through volatility and multiple crises
Chenavari's 18 years span an extraordinary sequence of market dislocations. Asked to name the single most important institutional capability that carried the firm through them, Fery pointed first to governance and culture rather than any specific trading edge.
"The fact that you have independent risk management throughout the firm. The fact that our team are encouraged to say what they think - that you have a forum for people to voice it if they're not comfortable with any transaction. That's what gives you the ability to go through crises."
He then laid out a simple three-layer model. "Number one is the approach: keep that humility, know that anything can happen. Number two is having the tools to monitor and track it - your risk systems, your analytics which are excellent at Chenavari. And three is experience which nothing can replace. You build up such an expertise in managing funds over a long period - how you manage crisis, how you construct your portfolio, how you manage cash, how you manage leverage - that throughout the years you get better. It's like old wine. As long as he is focused and personally invested in the strategies, an alternative investor will always be better after 20 years investing than after three."
Market setbacks, in this framing, are not just survivable but formative: "The road is not straight. There's volatility in the market, and sometimes you have to deal with deals you wish you hadn't done. But how you deal with the more difficult parts of the journey is what defines what you can become. Similar to life to some extent."
Talent: Grown, not bought
On attracting and retaining exceptional investment talent, Fery's answer again ran against the industry's mercenary grain. "Investment talent - from our standpoint, you rarely easily acquire it, but we can nurture it, with experience. What the firm has done a lot is hiring top brilliant people who've subsequently grown with the firm and developed into truly strong and exceptional talents. It's then all about retaining those people and making sure they feel part of continuing to build Chenavari's excellence forward. I am grateful to work with Chenavari partners and team who are quite exceptional."
A partnership, not a one-man show
Indeed, if there is one point Fery returns to recurrently, it is that Chenavari is a partnership - not the extension of a single founder. Throughout the conversation, he repeatedly credited some of the senior partners who lead the firm's core strategies alongside him: Frederic Couderc, Co-CIO and Portfolio Manager of the Chenavari Toro Income Fund; Vincent Laurencin, Deputy CEO and Head of UCITS; and Hubert Tissier de Mallerais, who runs the firm's specialty finance private debt activity. Together with the wider partner group, they embody the model Fery describes - deep expertise acquired over their respective careers in each segment of the European credit opportunity set, talent nurtured over many years within Chenavari, and a shared ownership of the firm's culture and its results. "No one achieves incredible things being alone," as Fery puts it - a principle that, at Chenavari, starts at the top.
In Part 2, Fery opens up about his 17 years as owner of French football club FC Lorient - famous for being profitable in all but three of those seasons - and about his son Arthur Fery's extraordinary wild-card run to the Wimbledon semifinals, the mindset behind high performance, and what running an alternative asset manager, presiding over a top league football club and parenting an elite athlete can possibly have in common.
This interview is part of Opalesque's ongoing series of conversations with leading alternative investment managers. For more, visit www.opalesque.com.
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