Carmignac sets sights on the UK
French asset management firm Carmignac Gestion has announced its intention to expand into the UK market this year.
The firm, founded by Edouard Carmignac in 1989, has grown to be one of France’s most successful asset managers, with some €55bn assets under management at end December 2010.
In its annual meeting with investors and advisors, Carmignac said the time was ripe now to tackle the UK, having established the public limited company in its home market of France, as well as expansion into Luxembourg (1999), Italy (2002), Switzerland (2003), Germany (2004), Spain (2005), Netherlands (2006), Austria (2009) and both Sweden and Singapore (2010).
The Paris-based firm has some 160 employees, including 13 fund managers and eight analysts. The firm’s capital is fully owned by staff.
Carmignac acknowledged the UK market was one of the most competitive in the world for mutual funds in the retail sector, but said it is not afraid of competition.
“We feel mature enough to venture into this market now,” said managing director Eric Helderle. “It has a strong equity philosophy we feel at ease with, and distribution is geared to independent financial advisors.”
Acknowledging the “cultural specificity of each European market”, he said the firm is also looking to Northern Europe, where open architecture offers some potential.
There is already a subsidiary in Luxembourg and two representative offices, in Madrid and Milan.
The firm now boasts one million investors, 85% of whom are not French. Globally, institutional clients form only a small portion (11%) of its investor base. Over one third (37%) are independent advisors and a further 27% are network advisors.
Banks and other networks account for 22%, while private clients comprise just 3%.
Through the financial crisis since 2007 Carmignac has managed to grow assets under management. “We did not see any outflows at all, and that is not just a market effect, it has to do with performance,” said Helderle.
Carmignac offers a relatively compact range of 18 global, specialized or profiled funds, as well as a mandate management offering. The Carmignac Patrimoine fund is now the second largest mutual fund in Europe. It has returned 114.18% since 2002 against a benchmark return of just 20.34%. The Carmignac Investissement fund is up 197.40% since 2001, against its index of 8.58%.
The firm intends to launch an emerging markets fund in the near future, aimed at capturing emerging markets growth and returns but limiting downside where possible. “It is for those investors who are interested in emerging markets, but also a bit cautious at the same time,” explained Edouard Carmignac, addressing advisors attending the firm’s annual open day in Paris.
Carmignac considers itself a pure manufacturing house but has not launched a new fund since 2007. “We tend to expand gradually,” Helderle added. The existing range is underpinned by durable themes, and asset gathering has never been an end in itself.
“Performance and service may be incompatible with grow for growth’s sake,” he added. “We have achieved critical mass, which is pleasing.” He said the company aimed for “carefully controlled growth guided by the principles of anticipation, discipline and reactivity”.
Carmignac Gestion describes its investment philosophy as non-benchmarked, conviction-based management, with an objective to deliver absolute performance.
There is active management of macroeconomic risk for all asset classes.
As a percentage of assets under management, 55% is in equities, while 45% is invested in bonds. Carmignac also follows key investment themes, notably emerging markets, Gold and commodities, European opportunities and interests in Innovation, the Environment and Health.