The newly launched EMERGENCE seeding platform, created in early 2012 with the backing of seven major French institutional investors and managed by internationally recognised seeder NewAlpha Asset Management, has announced its first seeding partnership with Eiffel Investment Group, through its compartment Emergence Performance Absolute.
After a rigorous selection process, driven by NewAlpha and closely associating investors, EMERGENCE will invest approximately USD40 million in the Eiffel Credit Opportunities Fund, a discretionary long short European credit fund managed by Eiffel Investment Group. This will bring the fund’s assets close to USD100 million, a critical size requested by many institutional investors before considering an allocation.
Launched in late 2011, the Eiffel Credit Opportunities Fund pursues an absolute return strategy by making long and short investments in credit instruments of European corporate issuers and financial institutions. In the first five months since its inception on 1 December 2011, Eiffel Credit Opportunities returned ca. 17%.
The strategy is well positioned in a context of regulatory changes affecting traditional credit investors, marked by the progressive disintermediation of the credit markets and the reshuffling of the established credit hierarchy between borrowers. Increased regulatory requirements applicable to banks, currently the main providers of financing to European companies, create a need for alternative funding sources through debt capital markets.
The Fund is managed by Emmanuel Weyd (pictured), who is in charge of credit strategies at Eiffel Investment Group since 2009. Emmanuel was previously a Managing Director on the credit desk of JP Morgan's proprietary trading division (PPB) in London. Prior to that, he had been co-head of European Credit Research and head of Debt Capital Markets for France, Benelux and Switzerland at JP Morgan. He started his career at Standard & Poor's as a credit analyst.
Eiffel Investment Group is an emerging alternative investor and asset manager, managing ca. EUR300 million in credit, equities and derivatives. Founded in 2008 as a division of commodity merchant Louis Dreyfus, it spun off mid-2011 and is now owned by Jacques Veyrat (the former Chairman and CEO of Louis Dreyfus group) and the team. Eiffel Investment Group employs a team of ca. 20 professionals headed by Fabrice Dumonteil.
The initial investors of the EMERGENCE fund are major French institutional investors, totalling over USD1.5 trillion of financial assets.
The French asset management industry is the largest in Europe by the amount of assets under management (EUR2.7 trillion as of end 2011), and is recognised for its expertise, innovation, and dynamism. The launch of EMERGENCE is an important step to facilitate the creation and development in France of the best talented investment managers and to strengthen the asset management business in France (more than 80,000 jobs today) over the long-term.
EMERGENCE matches a context of accelerating European and global competition in which seeding the most talented managers becomes a crucial issue for institutional investors looking for performance and transparency.
NewAlpha was established in 2003 to provide institutional investors access to emerging alternative investment managers through dedicated funds of funds. Since inception, NewAlpha has concluded 17 strategic partnerships and invested a combined total of over USD720 million with early stage managers located throughout the world.
The latest generation of managers seeded by NewAlpha since 2008 currently manages more than USD2.4 billion after receiving USD250 million in seed capital.
In November 2011, NewAlpha received for the second consecutive year the Best Seeding Platform Award at the HFR’s European Funds of Hedge Funds Awards. Several managers seeded by NewAlpha have been distinguished in 2010 and 2011 in Europe and in the US.
NewAlpha Asset Management is a subsidiary of OFI Asset Management, that manages EUR48 billion of assets as of 31 March 2012.