Hedge fund sales gain ground in france

While it is difficult for GSAM to sell its equity and fixed income products in France, where outsourcing is seen as weakness, and there are many good-quality domestic funds houses, Mr Fletcher’s team is having more success there with hedge funds. They are believed to have $130m with Crédit Agricole Asset Management’s fund of hedge funds unit, and much larger amounts, perhaps more than half a billion each, with houses including AGF Alternative Asset Management and Olympia among others. The hard task today is finding more capacity, and Mr Fletcher is increasingly the man in the middle. His distribution people and the client’s team are demanding the capacity, and it is down to Mr Fletcher to either find it for them, or suggest a product to use instead. “We are always looking at new ways to add capacity to existing products, or to create new strategies, on a standalone basis,” says Mr Fletcher, who is so concerned about regulations controlling the distribution of hedge funds that he will not mention any of the products. “Some hedge funds are closed, but one of them has just re-opened. We closed it for a long period of time, not due to capacity, but because we are improving our dealing systems and administration capability. From the alpha point of view, capacity is always there, but the fund took a year to upgrade.” New funds can also be created by taking whole teams of investment staff, who have left another organisation. GSAM is believed to have taken a team of 17 people from Amaranth. GSAM says this was not the team involved in natural gas trading. While some people in the market report that they are sometimes offered 130/30, long/short funds by groups unable to provide enough hedge fund capacity, Mr Fletcher says this does not happen at GSAM. “We believe that 130/30 funds are not a substitute for hedge funds,” he says. “They have a beta of one, and are competing with equity long-only products. They are in a completely different bucket.”