French lead the way in hedge fund seeding

France’s Oddo Asset Management has seeded a merger arbitrage fund established by former proprietary traders from Banque d’Orsay, in a further demonstration of willingness by French financiers to back new hedge funds.

Oddo is joining the likes of fellow French seeding group NewAlpha Asset Management in expanding its support for start-ups.

Reyl & Cie in French-speaking Geneva recently extended its seeding to Asia via a joint venture with Samena Capital.

Oddo Asset Management, a subsidiary of €22bn manager Oddo & Cie, is committing €100m to the Orsay Merger Arbitrage fund.

Orsay Merger Arbitrage will be run by Christian Fleury and Karin Benguigui, who worked together at Banque d’Orsay from 1999, and Sofiane Cheraba who joined in 2006. Fleury was head of Orsay’s M&A team since 1998.

Oddo & Cie bought Banque d’Orsay last year, importing expertise that allowed the group to found alternatives division Oddo Alternative Investment.

Pierre Baudard, that unit’s managing director, said the new expertise and investor demand spurred the launch of the fund, which will focus on announced deals in major equity markets.

Fleury likes biotech, apparel, and software sectors. Despite high levels of activity in oil and metals a couple of years ago, he sees little opportunity there now.

Between 50% and 80% of fund positions will be US-focused given higher levels of M&A there, he said. The fund is structured as an Irish QIF.

Oddo & Cie’s move follows news in mid-June from $650m compatriot financier NewAlpha Asset Management that it was launching an Asian seeding vehicle with Woori Absolute Partners, alternatives arm within South Korea’s Woori Financial Group.

WAP and NewAlpha AM previously co-seeded Asian credit fund Blue Rice Investment Management.

NewAlpha recently capped its latest emerging manager seeding vehicle with $160m.

In April, Genevan manager Reyl & Cie announced a joint venture with $400m Asian manager Samena Capital, which finances hedge funds via its unit Samena Asia Managers.

David Walker

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