France looks to the world
The recent creation of CCR Actions shows just how things are changing in the French money management industry.
CCR is the French subsidiary of Commerzbank. CCR Gestion manages Ffr39bn($6.5bn) but is overweight in fixed-income and money market products, which are generally declining. It needed to develop its equities business and did so from scratch. CCR hired two high-calibre equities managers, François-Marie Wojcik and Marc Renaud, from competitor Fimagest. Not only did CCR hire them, but it gave them each 10% of the new subsidiary, CCR Actions. It is a motivating factor,” comments Daniel Terminet, president of CCR. “Since they bring us their skills and long-built network, it is normal to give them a leverage.”
This deal shows the commitment of foreign firms to developing their Paris teams and how entrepreneurial such deals can be. It also demonstrates that there is room for niche players and for competition.
Three other recent cross-border deals signed also indicate how the management industry is adapting and blossoming. First, Fimagest, the asset management arm of Belgium’s Générale de Banque, acquired a majority stake in Boston-based Harbor Capital Management (HCM), with an option to increase its holding to 75% within seven years.
Second, BGP, a private banking subsidiary of Crédit Agricole, hired Boston Partners Asset Management to outsource all its US equities management. Third, United Asset Management (UAM), another Boston-based firm, started a French subsidiary, Expertise Asset Management, from scratch, with four Parisian professionals. UAM owns 80% as the management keeps 20% of the joint venture.
These three deals illustrate encouraging trends in the French asset management industry. The Fimagest-HCM case shows that French money managers can commit necessary resources to expand internationally. The big French commercial banks have not decided on such acquisitions yet, but SocGen and BNP nevertheless confirmed earlier this year that they would consider possible US buys or partnerships.
Doors are opening to foreign-French partnerships, as many French asset managers have real distribution powers, but rarely reach the critical size to meet performance and quality standards in all asset classes. It also points to the growing role of consulting firms in the selection process. Mercer handled the BGP tender offer, but Frank Russell and Watson Wyatt are the most mentioned in the French market.”