La Française AM sets out growth plans
La Française is a highly diversified financial group, but each part of it is set to expand in a coming year of “change and challenge”, according to the firm’s executives.
La Française is a highly diversified financial group, but each part of it is set to expand in a coming year of “change and challenge”, according to the firm’s executives.
Among the initiatives are the opening of a new office in London, additions to the firm’s Milan base, a high profile merger for the NExT AM incubation business and further joint ventures in emerging markets.
The main driver for the expansion is the changing nature of the global financial industry, with traditional bank lenders under increasing pressure (in Europe) from regulatory directives such as Basle III and Solvency II.
Says CEO Xavier Lépine: “There is growing pressure to finance the real economy. But Europe will be more and more financed by markets, and less and less by commercial banks. The ratio (of non-bank to bank lenders) is already 60/40 in the US, and we believe the same will happen in Europe in coming years. Asset managers will be part of that.”
At present, asset managers tend to be either subsidiaries of a large investment bank or smaller independents structured around expertise in one particular asset class. “The banks are organised in silos, so it is difficult for them to go outside a benchmark, while the independents (and there are more than 600 small managers in France alone) find it difficult to expand because they need both funding and expertise,” notes Lépine.
He feels the affiliate structure of the La Française group gives clients access to the best of all worlds: a solid parent (La Française is 85% owned by unlisted Le Crédit Mutual Nord Europe, rated AA by Fitch and A by S&P), and the entrepreneurship and service associated with smaller providers.
The firm is presently structured around three divisions. The first is La Française AM, comprising an asset management and a distribution business. Asset management includes traditional securities and La Française Real Estate Managers. Distribution is both French (Finance Services and Gestion Privée) and International (La Française International and La Française Bank).
The second pillar of the group is NExT AM (New Expertise and Talent), which incubates managers and takes minority stakes in managers and distribution channels. It is setting up NExT Advisor, a new business. The third pillar is GIS (Global Investment Solutions), established one year ago, which replicates the structuring capability of investment banks, but without proprietary trading.
