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New Managers
November 2014
SEEDERS' CORNER: ERAAM: "We believe more in individuals than in company or structure"Cyril Julliard Two fund of fund of hedge funds managers talk about their investments in emerging managers. Cyril Julliard and Olivier Kintgen, the two founders of ERAAM, a Paris-based asset management company they set up in 1998, explained to Matthias Knab during a recent Opalesque TV interview, why they decided to focus on emerging hedge fund managers. ERRAM only invests in Europe-based hedge fund managers, they said, but they decided to focus more on the small and emerging managers after 2008, after a re-evaluation of their management style. Olivier Kintgen had his own personal experience of setting up a CTA, and subsequently closing it due to difficulties in asset raising. "There was a problem in Europe, with managers having difficulties raising assets, because the support of the institutional network in Europe was weak and the support is still actually very much US for launches in Europe," he explains. "So with those managers having difficulty raising assets, we have made creative fee structures, which we think going forward should be very positive for the reconciliation between institutional money and hedge fund capabilities." ERAAM did better over the past three years and five years in the direct hedge fund allocation portfolio because of the emerging managers, says Cyril Julliard. "The risk-return profile is different with the emerging managers. It's not easy for a large institution to go through emerging managers, because of the process, the history, the due diligence, it's quite complicated. So I think that makes sense for large institution to delegate these parts." At the time, ERAAM counted CalPERS as one of its institutional clients. The company likes emerging managers for many reasons, he continues. The first one is that they can conduct accurate qualitative due diligence. "The guy who is l...................... To view our full article please login
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