At the initiative of the global competitiveness cluster FINANCE INNOVATION, and with the support of AFG (the French Asset Management Association) and Paris EUROPLACE, the Paris financial marketplace’s first seed-money fund, EMERGENCE, was created on January 19, 2012.
The creation of more than 400 entrepreneurial management companies in the past 10 years is a direct result of the recognized talent of French asset managers. A key necessity for these young companies, either based in or seeking to be established in France, is seed capital to manage from day one. This advantage is already enjoyed by their foreign competitors. Such capital allows management companies to quickly reach critical mass.
EMERGENCE was created to fulfill this goal. The fund was created as a multi-compartment UCITS to implement various investment themes with appropriate delegate managers. These include Absolute Performance, Long-term equity investments stakes, Sustainable and Socially Responsible Investment, etc.
The first compartment, EMERGENCE - Absolute Performance - designed to provide regular returns in all market conditions, recently raised EUR 120 million from seven major institutional investors: Caisse des Dépôts, Aviva Investors France, MACIF Gestion, BNP Paribas Cardif, CNP, UMR and CAVP. A second round fund raising is planned for this compartment before the summer of 2012. The launch of a second Long-term equity compartment is currently being studied.
The fund is structured to meet needs of both investors and the managers of the seed-capital funds through three major innovations aimed at accelerating and consolidating the development of selected funds:
placing investors at center of fund governance;
investor participation in the development of seed-capital management (through revenue sharing);
optimizing Solvability II constraints based on complete portfolio transparency.
The first Board of Directors, chaired by Alain Leclair, honorary President of AFG and a member of the Management Committee of FINANCE INNOVATION, designated NewAlpha Asset Management as the representative of financial management of this first compartment. Anaële Cojan-Baudant was named Executive Secretary of the UCITS.
The French financial management industry is Europe leader for the amount of funds under management (nearly EUR 2,700 billion at the end of 2011) and recognized for its expertise, innovation and its entrepreneurial dynamism. It now has a fund like those in the world’s other great financial marketplaces, aimed at facilitating the creation and development of young companies subject to a rigorous selection process.
This initiative is being taken in a highly turbulent financial context, with new constraints weighing on banks and insurance companies. Private and institutional savings must therefore contribute more to the needs of individuals and the overall economy by offering innovative, functional solutions. In this environment, third-party asset managers enjoy recognized experience, a rigorous regulatory framework and strict avoidance of conflicts of interest.
This initiative is being taken in the context of accelerated competition in Europe and worldwide, where the most promising seed-capital managers have ever-greater importance for all investors. It also contributes to strengthening the management center of the Paris Financial Marketplace (more than 80,000 jobs) with a long-term focus. Furthermore, it illustrates the dynamism and entrepreneurial spirit of its players, indispensable for economic recovery in the current environment.
The legal framework of the UCITS was designed with the cooperation of law firms Gide Loyrette Nouel and PWC Sellam.
