NewAlpha adds long only to hedge fund incubation role
NewAlpha Asset Management, the European incubator that is owned by La Francaise and OFI AM, has invested $45m each into two long only managers, marking the addition of long only investments to what has historically been a business focused on investing in hedge funds.
NewAlpha has defined the money invested as ‘acceleration capital’. The $90m invested comes out of a total of $250m raised from 12 institutional investors. The remaining $160m is set to be committed to further long only managers, with expectations that investments will be made before the summer, according to Antoine Rolland, CEO/CIO (above) and Philippe Paquet, managing partner (below).
The overall $250m raised is being invested via the manager’s Long Only Equity strategy, which is a sub-fund to its French Sicav Emergence.
The two managers into which the initial $90m has been invested are Focus Asset Managers and Financière Arbevel.
Focus AM was founded by Frédéric Motte and Jérôme Archambeaud, and specialises in value investing in the consumer goods, manufacturing and services sectors. The manager’s flagship fund has AUM of $150m and a strong 10 year track record, NewAlpha said.
Financière Arbevel was taken over in 2009 by Jean Baptiste Delabare and Sébastien Lalevée, who specialise in French and European equity. In five years AUM went from €30m to €300m.
Paquet said: “For a number of years now, NewAlpha AM has been among the leading platforms in the hedge fund arena. We absorbed Next AM in 2013 and focused our efforts in 2014 on consolidating our business model. In 2015, we intend to build on our skill set and develop business globally. We are witnessing a clear demand for investment solutions at the crossroads of private equity, absolute return and long only investing. Going forward and to leverage our new capabilities, we are going to diversify into pure Private Equity and launch at least one fund in 2015.”
According to Paquet and Rolland, the backdrop of market volatility and improving sources of alpha make it a good time to move toward the long only space. They see many investors looking for new investment manager talents, to diversify, and access innovation.
Rolland added that there was a growing role for incubators acting as a bridge between larger institutions and asset management innovators.
Founded in 2003, NewAlpha has 31 active partnerships managing more than $11 billion. It has allocated $350 million through 14 partnerships since 2012.