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Integrated takes control of Paris fund of hedge funds manager

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Integrated Asset Management has agreed to acquire 51 per cent of Altigefi, a Paris-based fund of hedge funds manager.

Integrated Asset Management has agreed to acquire 51 per cent of Altigefi, a Paris-based fund of hedge funds manager. Integrated bought a 9 per cent stake from an individual shareholder last August, this month acquired a further 40 per cent from its management and founding shareholders, and has now agreed with the remaining shareholder, Financière Atlas, to acquire a further 2 per cent of Altigefi’s issued share capital.

Financière Atlas, which up to now has been Altigefi’s main distributor in France, is a subsidiary of Luxembourg-based private bank Sal. Oppenheim Jr & Cie, which is also the largest shareholder in Integrated.

Integrated acquired the 49 per cent for an initial price of EUR7.7m, consisting of 92 per cent cash with the remaining 8 per cent in restricted shares. Further deferred cash payments of up to EUR750,000 are payable dependent on future growth in assets under management. The London firm is paying an additional EUR320,000 for the 2 per cent stake that gives it a majority.

As part of the transaction, Pierre Edouard Coiffard and Bruno Lescoat, the co-founders of Altigefi, will become senior members of Integrated’s investment team in London and Paris.

As part of the multi-year distribution agreement, Integrated and Financière Atlas will co-operate closely to develop the French market for institutional alternative products.

Altigefi’s turnover for 2006 was EUR5.6m, up from EUR4.5m the previous year, while pre-tax profits rose from EUR800,000 to EUR1.5m. For the first half of this year, turnover was EUR3.4m and net profit before tax was EUR1m. Altigefi’s net assets have grown from EUR1.2m in 2005 and EUR1.8m last year to EUR2.4m  at the end of June.

Altigefi manages four main funds of hedge funds with a total of USD1bn under management. Its flagship product is the Altipro family of funds, a low-volatility product with a nine-year track record.

‘We are delighted to deliver another of the objectives stated at the time of our fundraising earlier this year,’ says Integrated chief executive Emanuel Arbib. ‘This acquisition is a further example of our strategy to augment our organic growth with strategic acquisitions in the fund of hedge funds industry.

‘As a leading low-volatility funds of hedge funds provider, Altigefi’s products will complement our existing offering in the European market, in particular with the addition of one of the best low-volatility funds. Altipro was one of the few funds to have made money in the very volatile July-August period.

‘The acquisition provides us with a strong exposure to the attractive French market for alternative investments, which we did not previously have. The enlarged Integrated platform, with USD2.5bn under management, is now a pan-European group, with a significant presence in the UK, Germany, Italy, Switzerland and France.

‘This transaction witnesses the strong and developing relationship we have with the Sal. Oppenheim group, including Financière Atlas. Finally, the Altigefi team brings formidable skills, experience and investment track record to Integrated.’

Financière Atlas chief executive François de La Baume adds: ‘We are very pleased to extend our exposure to alternative investments by partnering with Integrated Asset Management. We aim to leverage this key relationship to continue to provide the highest quality alternative investment products to our clients while assisting Integrated in developing its presence in the rapidly expanding French marketplace.’

Since Sal. Oppenheim holds 28.3 per cent of Integrated’s issued share capital, this transaction constitutes a related party transaction under the Aim rules. Following consultation with Noble and Company, IAM’s adviser, the board of directors has concluded that the terms of the transaction are fair and reasonable.

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