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Investcorp-Tages: Best Seeding Platform

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During the challenging last 18 months, Investcorp-Tages – this year’s winner of Best Seeding Platform – has been focused on how to continue best serving its clients.

Lionel Erdely, Co-CEO and CIO at Investcorp-Tages, says: “At the height of the crisis, we had a strong emphasis on capital preservation. As the situation normalised and improved, our investment team was focusing on identifying the new opportunities arising from the fluid environment.” 

The company has also been able to leverage its larger and more global investment infrastructure, resulting from the integration of the Absolute Return Investment teams of Investcorp and Tages. “Our focus on absolute return and high alpha strategies has been very relevant in the challenging environment we have been navigating,” Erdely adds. Over the period, the company’s assets have grown by USD1 billion to reach USD7.3 billion as of 1 October 2021.

In a context of tight risk premia across the board for traditional assets, Erdely believes there is a growing need for investors to find investment opportunities offering optimal return and diversification properties. 

“We are noticing a greater investor interest in solid and consistent alpha generation which translates into an increased need for steady and new sources of alpha above and beyond a well-contained market risk exposure,” he says. “We anticipate this trend will continue and accelerate.” 

Industry trends

Another accelerating trend is the shift towards more socially-conscious investing, such as ESG and impact investing. Investcorp-Tages believes this will have a profound and secular impact on financial markets, corporates, asset owners and asset managers. 

“We have incorporated ESG in practices across our businesses,” Erdely says. “We are proud to have recently launched our first impact fund in Europe and are increasing our resources dedicated to this area.”

The strategic partnership dimension has become paramount to Investcorp-Tages’ clients, as the level of customisation needed to achieve their investment objectives increases. The company has therefore developed a robust, broad and flexible investment infrastructure to address the context of additional regulatory, reputational and liability driven constraints. 

Erdely points to insurers’ desire to increase their exposure to alternative strategies and concurrent need for solutions that will take into account solvency cost and requirements, as well as ESG and sustainability criteria. “State of the art technology to access very granular and customised reporting is also becoming more important to our clients,” he adds. 

Investcorp-Tages has continued to be active in the seeding space, with three new strategic partnerships established since the set-up of the joint venture. The company has also just launched its first social impact fund focusing on European firms, and has extended its fund due diligence capabilities to the private debt sector with the launch of a new private debt fund.

In the coming months, Erdely expects the industry to continue to grow and strengthen. He predicts the greater need for customisation as investors increasingly include diversification in their allocation criteria and thus require flexibility to leverage attractive investment opportunities. The increased focus on ESG considerations, and more capital deployed into seeding, as well as hybrid products (combining different liquidity profiles or merging private equity structures or hedge fund), increased interest in thematic investing, and solid AuM growth in cryptocurrency funds will also be burgeoning themes. 

Lionel Erdely, Co-CEO, CIo, Investcorp-Tages
Prior to joining Investcorp in 2013, Lionel Erdley worked at Lyxor Asset Management for 11 years, where he held the dual position of Chief Investment Officer (2004 – 2013) and Chief Executive Officer of Lyxor Inc (2009 – 2013). Prior to joining Lyxor, he was a Vice President in the Equity Corporate Finance department at Société Générale, where he worked on several IPOs, capital increases and convertible bond issues. Erdley has an MBA Degree in Finance from the École Supérieure des Sciences Économiques et Commerciales (ESSEC) in Paris.

Jonathan Feeney, Managing Director, Investcorp-Tages
Prior to joining Investcorp in 2003, Jonathan Feeney worked for Cazenove Capital Management in London where he was a member of the Investment Strategy Group and Investment teams. He has also held positions in management consulting and quantitative analysis, and has more than 25 years’ of investment experience. Feeney holds an MSc in Economics and Finance from the University of Bristol and the IIMR (UK equivalent of the CFA).

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