Many up-and-coming asset managers are facing more problems
than ever before when it comes to attracting money into funds.
In many ways most small funds are getting caught in a Catch-22:
they don’t attract assets simply because they are
It is a vicious circle within which asset managers
can’t attract investment flows unless they are of
sufficient scale and size, and they can’t grow
unless they hit the milestone of around $100 million –
if not more.
All professional investors know that there are many advantages
to investing in emerging managers – early-stage
managers on average tend to deliver higher returns than
established players and there is anecdotal evidence to suggest
that early-stage managers have indeed consistently outperformed
significantly established managers.
The French government, along with several major investors, has
assisted in the creation of the Emergence seeding platform. The
government’s motivation is because it realises the
significance that a robust asset management industry can have
in creating a healthy economy.
Seeders like Emergence enable a UCITS-compliant alternative
fund to reach critical mass – which should eventually
result in more investor inflows – and hopefully a
healthier up-and-coming asset management industry –
though France may be a questionable example if it has an
industry that is also saddled with a transaction tax.
An example of what Emergence has been doing is the
UCITS-compliant version of the Diva Synergy strategy, the
merger arbitrage and pre-event strategy managed by Paris-based
Bernheim, Dreyfus & Co, which has been one of the first
asset managers to take advantage of using the Emergence seeding
Other European countries with a significant asset management
industry should perhaps also develop their seeding platforms
for local asset managers – and the UCITS wrapper
should be the ideal tool to use because of its established
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