Newly recharged Oddo AM takes acquisition ambitions to Europe
Oddo Asset Management, having digested two rich acquisitions in a year, is set to go on the offensive across Europe.
The ink is barely dry on Oddo & Cie’s acquisition of Banque Robeco, the private banking arm of French firm Groupe Robeco, the second significant purchase in the past year. In December, the independent French family group moved on Banque d’Orsay, part of a blistering pace of expansion embarked upon when most other financial firms were still frozen by the global crisis.
Oddo & Cie, founded in 1849, is proud of its go-getting style. “Telling it like it is, unlocking initiative, seizing opportunities together, freeing up our energy, being committed to success. These principles guide the service we deliver [to] our clients each day,” affirms the company mission statement.
The recent bold additions bear that out. Banque Robeco has boosted private banking and back-office activities, adding some €1.3bn to Oddo Banque Privée’s €3.7bn. It also brought third-party portfolio management accreditation, account maintenance and fund custody activities.
Banque d’Orsay, shed by consolidating German bank WestLB, offered two main business lines: asset management (40 open ended and dedicated funds) and private banking. Its expertise in European equity, fixed income and absolute performance funds will complement the offering from Oddo Asset Management, which now has some €13bn in assets under management, a rapidly expanding investment team and ambition to match.
Under Jean-Philippe Taslé d’Héliand, deputy managing director, the firm is set for action on a wider European stage, and to make its mark within Oddo & Cie, where the Oddo family maintains a 42% ownership, alongside employees (30%), principal shareholder the Allianz Group (20%) and others.
Taslé d’Héliand is proud to be part of a club of ten to 15 medium-sized (up to €50bn) independent French asset managers, but warns: “We are keeping our feet on the ground and our head on our shoulders. We are trying to do something that is very simple and yet very complicated: to deliver alpha in specific asset classes where we have a competitive edge, and in a transparent, consistent way.”
Focus on non-french
In the next five years he aims to build a larger international business, well-diversified by asset class (fund) and client (both institutional and retail). At the moment, some 90% of the firm’s clients are French. However, Bertrand Levavasseur, head of international sales, says the aim is to substantially increase assets under management for non-French clients.
“We are hiring front-, middle- and back-office teams to deliver this,” he says. A new head of marketing comes from Banque d’Orsay, and product specialists, notably in corporate bonds, are being recruited. Having joined Oddo himself in 2007 from PIM Gestion (Philippe Investment Management), after a stint in Hong Kong, Levavasseur is targeting hefty growth for the international business. Oddo AM aims to double its assets under management by 2015.
In mid-caps, Taslé d’Héliand says, where Oddo has special expertise, a doubling of assets under management can be achieved without disturbing the proven investment process. “We could gather another €4bn with the team we have in place. We have the liquidity and the skills; it is just a question of building a track record.”
He adds that although the energy and intent was always there, such a project could not have been contemplated in the past five years. The 2007/08 financial crisis brought everything to a halt while firms concentrated on day-to-day survival. Since then, the group has been focused on integrating its acquisitions. But management has now written a new ambition.
Levavasseur says: “In 1995 we had €1bn under management; by 2007 it was €15bn, it went down to €10bn. We are back up to €13bn now. We started to see a pick-up in 2009 and business in 2010 was very strong.” His team of nine, operating in France, Italy, Switzerland, Germany, Austria, Benelux, the UK and Dubai already accounts for half the business of the firm.
He is now actively targeting Switzerland, Germany, Luxembourg, Italy and Spain, with new offices and hires. The firm has funds in seven asset classes but tends to focus business efforts on its top performers: mid-caps (where it manages some €3bn); convertible bonds (where a commodities convertible bond fund was successfully launched; and ‘thematics’, which include a €400m real estate fund and the flagship Oddo Generation fund, which focuses on family-run and owned holdings.
Taslé d’Héliand says long/short strategies will become the firm’s fourth area of expertise. Oddo runs €150m in two funds at the moment, but is set to expand into retail-directed hedge funds (Newcits), using new expertise from the Banque d’Orsay team.