BNP Paribas Asset Management is merging its funds of hedge funds interests with London-based Fauchier Partners to create a major FoHF business.
Earlier this week, the two groups announced that the operations of their joint venture, BNP Paribas Fauchier Partners (BNP FP), will merge with Fauchier Partners. BNP PAM will acquire a 50 per cent economic interest in the enlarged Fauchier Partners in consideration for contributing its shareholding in BNP FP and making additional cash payments. Majority voting rights will however remain with management.
Fauchier Partners' founders, Patrick Fauchier and Christopher Fawcett, will continue as Chief Executive and Chief Investment Officer respectively and the membership of the firm's investment committee will be unchanged. BNP FP's team will join the enlarged firm.
Following the merger, which is subject to regulatory approval, Fauchier Partners will become one of Europe's leading dedicated managers of Funds of Hedge Funds with assets of the equivalent of some USD 3.5 billion (EUR 2.7 billion).
Clients for whom the enlarged Fauchier Partners manages portfolios include pension funds, financial institutions, corporations, charities, university endowments and family groups.
Commenting on the merger, Gilles Glicenstein, Chief Executive Officer of BNP PAM said: "Developing our alternative investment business is at the heart of BNP PAM's strategy. Our ambition is to be one of the European leaders in this field. To do this, we found it was necessary to be allied with the best professionals; that is why we established an alliance with Fauchier Partners three years ago."
He added: "The creation of this new entity is a natural development in the cooperation between BNP PAM and Fauchier Partners. It will enable us to combine an entrepreneurial approach which is so essential to successfully managing funds of hedge funds, an independent investment process and the dynamism of an international group. This will enable us to consolidate our position as a major player internationally in this sector."
Patrick Fauchier, Chief Executive of Fauchier Partners, said: "We have worked with BNP PAM over the last three years and have been delighted at the way our joint venture has developed over the period. Both our firms feel that the time is now right to simplify the current 'two company' structure. The merger achieves this in a single step. Management continuity will ensure that our well-developed investment process will be applied to all clients on a consistent basis. We believe that the merged entity will be even better equipped to serve clients and be more attractive to the professional talent we need to maintain our leading position in the industry."
BNP Paribas Asset Management is one of the leading players in European fund management with EUR 197.3 billion of assets under management (This figure includes BNP PAM's affiliates and BNP Paribas Group assets where BNP PAM acts as advisor accounting for EUR 48 billion) of assets under management (as at 30th September, 2004). The asset management business employs over 1,300 staff in 20 countries. Its fund management teams are active in all of the world's major financial markets, including Paris, London, New York, Tokyo and Hong Kong. They are specialised by asset class, investment style and geographical area.
Established in 1994, Fauchier Partners is a specialist firm dedicated to the construction and management of customised portfolios of hedge funds. The firm's clients include family groups, financial institutions, major European corporations, charities, university endowments and pension funds. Fauchier Partners also advises a number of funds of funds, including the Absolute Return Trust for Charities (in conjunction with Cazenove Fund Management), the Baring Asia Hedge Select Fund, the EDM Capital Selection Fund, the Fauchier Allocator Funds, designed for investment by the Merrill Lynch Asset Allocator investment trust, the Fides family of funds and the Guernsey-based Paragon Capital Appreciation Fund. Its joint venture with BNP Paribas Asset Management, BNP
Paribas Fauchier Partners, was established in July 2001.