Pick of the pioneers
Yuri Bender finds out what inspires the choice of fund selections at France’s Banque du Louvre. Banque du Louvre celebrates the 15th anniversary of its inception this year. After Lazard and the two Rothschild firms, it is France’s best-known private bank. It is also one of the country’s biggest distributors of investment funds, boasting more than 50 partners including Alliance Capital, Goldman Sachs, Lombard Odier and Credit Suisse. Unlike other more hit-and-miss distribution channels, Banque du Louvre’s managed portfolio service almost guarantees healthy fund inflows. It has gathered almost E7bn to be managed by its external partners. “The agreement we have with Banque du Louvre is a bit special,” admits Gerard Kanengeiser, managing director of Credit Suisse Asset Management (CSAM) in Paris. CSAM’s European convertible bond funds are included in the Louvre Multi-Gerants Programme. “The distribution of our Sicav is made to both high net worth private clients and institutional investors, so important amounts of money come into the product. With retail bank agreements, you are never sure how much money you will receive.” Grand inquisition Every year, the bank’s distribution partners attend a two-day Hollywood-style extravaganza in one of Paris’s top hotels. They present their case to be maintained in investors’ portfolios in front of private clients, journalists and the crčme-de-la-crčme of French finance. They are questioned by Mr Guillaume Dard, Banque du Louvre’s still-youthful 44-year-old managing director. Playing a flamboyant mix of slick showman and grand inquisitor under the conference lights, he asks pointed questions about stock selection, risk control and portfolio construction and elicits intriguing answers. “Why do you still own Harley Davidson in your portfolios?” Mr Dard asked Ralph Wanger, veteran small-cap manager at US boutique Liberty Wanger. “Harley Davidson is one of the few brands you tattoo on yourself,” answered Mr Wanger. “Once you have an Eagle on your shoulder, you can’t buy a Kawasaki bike.” In his wood-panelled boardroom overlooking Paris’s Boulevard Hausmann, the public performance is toned down and Mr Dard cuts a more cerebral, thoughtful figure. He was born into a banking family, earning his spurs at the old French protestant-style institution Banque Vernes, before running capital markets for BFT, at the time jointly owned by Crédit Agricole and CCF. When Banque du Louvre emerged from the BPDC commercial bank in 1988, it found a new, unique focus under Mr Dard and chairman Jean Taittinger. Today, the multi-manager channel it once pioneered has become the accepted method of efficient third-party product delivery in France. “Our idea at the time was that no banks could have the best fund managers in every asset class. Our concept of the asset allocator was completely new, but we achieved success quickly. Now it’s a crowded marketplace,” says Mr Dard. The right mix Manager selection is supervised by Mr Dard’s lieutenant, Thierry Callault, referred to as “the best in France” by one of the bank’s key competitors in the local market. “Success in this market is not just about finding which fund was best last year, but finding the right mix,” reveals Mr Dard. “We are in the multi-manager business to select and assemble managers. Assembly is a craft and it’s one of our strengths. “We can offer customers a complete open architecture model, allowing them to choose from 600 funds,” he reveals. “But this makes no sense. To really give clients some value-added advice, you need to focus on 30 to 35 managers. We are not a supermarket. We are craftsmen providing luxury goods and the service that goes with them.” And the rest of France believes him. In December 2002, Banque du Louvre was voted first out of 60 institutions – ahead of the asset management arms of CDC Ixis, Crédit Agricole and Société Générale – by a panel of banks and life insurance companies surveyed by financial consultancy Amadeis. The panel assessed quality of fund management, reporting, research and sales and marketing skills. The one chink in Mr Dard’s polished armour is the recent move by HSBC subsidiary CCF to boost its shareholding in Banque du Louvre from 85 to 99.9 per cent. With HSBC boasting a rival multi-manager subsidiary, the future of the positioning of Banque du Louvre’s offering is under review. At the time of the last conference, the most popular picture showing at Paris cinemas was the James Bond film, “Meurs un autre jour” (“Die another day”). While reluctant to comment on concern in his bank regarding any proposed restructure, Mr Dard hopes that day is still a long way off.
