iM Global Partner, the Paris-headquartered investment and asset management development platform, has acquired a minority stake in Boston-based long/short boutique Sirios Capital Management.
Established in 1999, Sirios is a Boston-based, employee-owned investment firm with $2.3bn in assets under management. It runs three strategies including a US long/short equity strategy, an alternative liquid fund which replicates partly the long/short fund but shorts either US large caps or indices and a long-only equity strategy which consists of the long book of Sirios’ US long/short equity strategy.
iM Global Partner’s investment will enable Sirios to continue to support its current investment strategies and will support their sales and marketing across the United States and abroad.
Philippe Couvrecelle (pictured), founder and chairman of iM Global Partner, told InvestmentEurope the platform wanted to invest in an alternative asset manager firstly for diversification purposes and secondly because a new market environment is coming.
“It is an opportune time to make this deal with Sirios given current equity market valuation levels as well as forthcoming turmoil to be expected in this field. The environment we have known for the three last years is set to be shaken up. Sirios has a track record of almost 20 years and proves exceptional outperformance with a robust bottom-up process. We have been in talks since a year; the launch of our US distribution platform (led by Jeff Seeley) last March has sped up the process,” he said.
Noting that Sirios had already established presence in Europe through the Schroders Gaia platform, Couvrecelle pointed out the long/short equity manager had demonstrated strong interest in iM Global Partner’s distribution capabilities across the US. He said that Sirios’ equity approach is very complementary to that of Polen Capital, a US growth equity manager also invested by the platform.
“Currently we conduct talks with US value equity managers and I hope to make a deal with one of them. We do not see an issue in partnering with numerous equity managers whose styles are different from one to another. A number of institutional clients are mixing equity styles in their portfolios to optimise their performances,” Couvrecelle added.
iM Global Partner has set a target to invest over $500m within two to four years with current (Eurazeo, Groupe Dassault / La Maison, Amundi) and future shareholders. And the opportunity pipeline seems well-fuelled for iM Global Partner as its founder said the platform seeks to seal one or two partnerships in the alternative field in addition to the Sirios’ deal by year-end.
On the long-only segment, it looks for US value equity managers, global and emerging equities companies as well as credit boutiques carrying a different profile than Dolan McEniry. European equities boutiques are also part of the searches conducted by the French firm.
“We pay close attention to the investment process’ robustness and regularity of the firms we meet. If we do not understand the process clearly, we will not invest therefore we do not consider “black box” managers. Over the mid-long term, asset managers we invest in must have their funds positioned in the first, second or third decile. Though we are ready to accept hard times.
“Long/short equity funds have been suffering given the unfavourable market environment in place since a few years. We would rather invest now than at times of stunning outperformances since assets under management would still be sizeable and the partnership will cost less for us certainly,” said Couvrecelle.
New market developments remain in the scope of the French platform. “We discuss with talented ESG specialist managers and others that have implemented artificial intelligence to optimise their portfolio management capabilities. It is not a burden at all for us. Though their investment process needs to be clear in the end,” highlighted iM Global Partner’s founder.
Additionally talks are ongoing with two or three potential partners to join iM Global Partner’s shareholding structure.
“Our focus is to secure at least a partnership with a new industrial shareholder, either a large insurer or asset manager, that would be interested in the construction of an international multi-boutique platform,” explained Couvrecelle to InvestmentEurope.