The Maple Model: Structuring managed accounts at scale
Interview with Jonathan Planté, Director of Business Development, Innocap…
What have been the key business developments at Innocap over the last 18 months?
An important development we are seeing is that the mandates on our platform are increasingly larger in scale. Over the past 18 months, we continued to gain a lot of ground with public pension funds whose assets under management exceed USD100 billion. We are experiencing steady growth in the average size of allocations per fund. For instance, we onboarded USD1.75 billion into a single fund on behalf of a European financial institution.
On the North American side, we now work with half of the Maple 8, the eight largest public pension plans in Canada, which collectively manage more than USD1.2 trillion in assets. We are also present in the US where we have been successful with public pension plans above USD60 billion in assets. These institutions are seeking transparency and control over their investments, which is exactly what we provide. One angle we bring is a high degree of customisation in terms of their portfolio’s risk framework as we can offer significant flexibility in how allocations are structured. This allows us to tailor investment mandates and risk limits to more closely manage risk and monitor managers on an ongoing basis.
It ties directly into our capabilities because our teams have professionals who come from a number of public pension funds, including several of the Maple 8. We have a first-hand and profound understanding of the nature of these investments and thorough expertise in structuring a wide range of strategies.
Which solutions are clients turning to and how are you evolving with their needs?
Our dedicated managed account services continue to serve our clients very well. At the same time, we have also evolved to offer co-investment solutions, especially for “best ideas” in the private deal landscape. Indeed, several large allocators are now looking at specific investment ideas coming out of asset managers. To meet this appetite, we created a hybrid structure offering that can provide direct access to high-conviction opportunities more efficiently.
Just recently, during the pandemic, we launched a fund of this nature with USD150 million allocated to a single security. In this fund, we onboarded an Asia-based manager in less than a month from vehicle creation to cash deployment. It was structured in a way that supported the allocator through the complex risk deployment, legal and operational processes inherent to this type of allocation.
We believe client interest in these investments comes back to the desire for control over assets, particularly to better customise their risk framework when deploying highly concentrated investment ideas. In fact, the pandemic has put the focus on the need for more control over allocations. In this context, some of the largest public pension plans have been making important increases in co-investment allocations and we expect this trend to continue.
How do you build client relationships and how has that changed in the current environment?
While there’s no substitute for in-person contact, our identity is rooted in deep connections with our clients that are much stronger than a typical partnership. One of our core values is being their allies in any environment. We devote particular attention to understanding their KPIs and building on their vision with our experience and market best practices. We have always operated as an extension of their team. It’s true that periods of stress are real tests when it comes to client relationships. If anything, ours have become even stronger during the pandemic while we all work remotely and connect in new ways. As a partner supporting clients in their mandates, our knowledge base is a value-added and a great source of comfort for them as they pursue their allocation objectives, particularly during times of uncertainty.
I believe we have tapped into something since we are also developing several new relationships right now. Our success in this regard is directly related to our culture: we are always authentic in how we present ourselves and deal with people, whether clients, prospects or service providers. Our human approach is really resonating with prospective clients who are increasingly looking to build a more personal rapport. Overall, clients and prospects are definitely becoming more engaged and this makes for a richer conversation. Regardless of the global context, we always strive to broaden and build relationships.
Jonathan Planté, Director of Business Development, Innocap
Jonathan Planté is Director of Business Development at Innocap, a premier managed account platform for institutional investors. He focuses on structuring investment programs by customising risk, governance, legal and operational frameworks. To develop effective solutions, Jonathan believes in building partnerships that empower clients with control and transparency.
During his 14 years in the alternative investments industry, he has held various roles across North America and Europe in private and public markets. Jonathan holds a graduate degree in Finance from HEC Montréal, a Master’s degree in International Business Development from ESC Saint-Étienne and the CAIA designation. For the past 5 years, he has been a lecturer at HEC Montréal where he teaches alternative investments to graduate students.