A joint venture between BNP Paribas CIB and BNP Paribas Investment Partners’ asset management division has led to the creation of a new Investment Partner: THEAM.
The new entity, a 100 per cent owned subsidiary of BNP Paribas IP, is headed up by Gilles Guerin as CEO and represents a melding together of two specialist divisions spanning investment banking and asset management: SIGMA, whose team comprises 89 asset management specialists managing EUR44.3billion in client assets as of end-December; and Harewood Asset Management, created in 2004 by BNP CIB’s Equity Derivatives teams and whose team of 35 capital market specialists manage assets of EUR4.7billion.
Total assets under THEAM at inception are EUR49billion (again, based on December 31st figures). Following the SIGMA/Harewood merger, a team of 120 employees will focus on servicing clients utilising best practices consistent with investment banking and asset management: a strong proposition given increased investor demand for greater transparency, responsiveness, security and a desire for market innovation. THEAM has the support of 400 sales staff and a strong distribution network spanning 44 countries worldwide.
For portfolio management services, THEAM provides expertise in four main areas. They include: Active systematic management (EUR2.4billion), with THEAM’s quant-driven approach giving optimised access to equities, commodities, “hidden assets” and multi-assets; ETF and Index management (EUR15.9billion), using indexed funds and EASYETF tracker funds; Guaranteed and protected management (EUR25.1billion), either through active or passive (formula funds) management of assets; and finally Liquid alternative management (EUR5.4billion) by offering internal absolute return strategies that are UCITS III-compliant or external strategies via managed accounts and Fund of Hedge Funds.
Looking at THEAM’s alternatives offering, the emphasis is on liquidity provision and providing a strict risk control framework. Multi-strategy and single strategy products are available, the latter being more systematic and focused on target markets. In a multi-managed capacity, THEAM provides portfolios of FoHFs and managed accounts in an open-ended or bespoke structure. Given the pressure to meet liabilities that pension funds are under right now, Guerin said that he believed there was a “strong demand” right now, noting that THEAM’s ability to mould portfolios specifically to clients’ demands was important.
“There’s a real need for yield but pension funds have various constraints on liquidity, transparency, capital protection etc: that’s where we fit in,” says Guerin. “Whatever your specific constraints are, we’ll work within them to build the best portfolio of hedge funds.”
Clients wishing to focus on managed accounts will have access to Innocap, a managed futures platform created in ’96 to supervise the National Bank of Canada’s alternative investment activities. BNP Paribas bought a 25 per cent share in the platform in 2007. Over half of the 45 managed accounts (totalling USD2.2billion in AUM) provide daily liquidity. Guerin added that Innocap was critical to THEAM in ensuring that it had all the tools available to meet investors’ constraints.
When asked by Hedgeweek what his AUM forecast for THEAM was within alternatives, Guerin said that he anticipated growth could reach “EUR10billion to EUR15billion within the next five years”. He also believed that overall THEAM AUM would increase from EUR49billion to EUR100billion within five years.
The name THEAM derives from the Greek word “Thea” which means attention, commitment, knowledge and openness to the world.
