iM Global Partner, the French asset manager that has been growing through acquisitions, has announced its latest deal, which involves the purchase of 45% in Dynamic Beta investments, a New York based liquid alternatives manager.
The acquired manager offers three main strategies: Equity Hedge, Managed Futures and Multi-Asset/Stable Return. Dynamic Beta investments is focused on delivering hedge fund diversification and performance benefits, but with lower cost and ensuring daily liquidity.
Philippe Couvrecelle, chairman and CEO of iM Global Partner (previously branded iM Square), said the deal came after some two years of seeking out the right partners in the alternatives industry.
“We felt we had to diversity the portfolio of partners. We started with Polen Capital (US and global equities), the second was Dolan McEniry (fixed income). In 2016 we started the search in the alternatives world. In July we partnered with Sirios Capital Management (long/short equity), and now we are announcing the deal in the liquid alternatives space.”
“There is momentum in the market. We feel that in the coming two, three, four years there could be a lot of interest in non-correlated products in the market. That’s what Dynamic Beta investments have.”
Couvrecelle sees strong demand from institutions for non-correlated assets, at a time when returns from fixed income is low, in terms of yield.
“Also, they have not necessarily had success with traditional hedge funds. That’s why the liquid alternatives space is interesting.”
Another noted is that traditional hedge fund fees of 2 & 20 have, according to some calculations, left managers earning more money than their clients.
“This approach is not really sustainable for the industry. Liquid alternative products could be very efficient for a lot of investors.”
iM Global Partner is focused on buying stakes in boutiques globally. It now has minority stakes in four managers: Polen Capital, Dolan McEniry Capital Management, Sirios Capital Management, and now Dynamic Beta investments – totalling AUM of over $30bn as of July 2018. Key shareholders in iM Global Partner include private equity investor Eurazeo, Amundi, Groupe Dassault and La Maison.
Couvrecelle said that while the acquisitions made thus far have been focused on US managers that can be brought to Europe, iM Global Partner is still open to the idea of investing in Europe. He said that there were a number of discussions ongoing with European companies, and that he hoped at least one investment would be made in the coming 12-18 months in the region.
“The global picture is to invest €500m in the US, Europe and Maybe Asia in the coming 2-3 years. We have strong ambitions and a strong push on distribution in Europe and the US.”