5 July 2011 - Gide Loyrette Nouel advises promoters on the creation of the first seed money fund in the Paris financial marketplace: le Fonds d'incubation Emergence:

Over the ten past years, the French market has set up a vast network of entrepreneurial asset management firms (over 300), specialising mainly in dynamic management, private wealth management, alternative investing, funds of funds and private equity. Many are becoming increasingly active internationally. All express the need for seed money in their first years of existence. 
 
In this context, Finance Innovation launches Emergence, the first French Emerging Manager Fund. Emergence will provide seed money to the most promising and innovative investment funds, managed by newly created French or international asset managers, incorporated in France.  

It aims to generate for investors a double source of revenues: the performance of the incubated funds and fee-sharing from seeded managers. This scheme enables investors to benefit from the seeded asset managers growth without taking equity capital risk (thus improving investor Solvency II requirements). It will also enable them to detect the talented managers of tomorrow.  

The key French institutional investors (Caisse des Dépôts, insurance companies and pension schemes) have expressed their strong interest for the project. These investors will play a key role in the governance and monitoring of the Fund.  

Emergence will be structured as an umbrella contractual fund (SICAV), with a series of sub-funds dedicated to different asset classes (equity, absolute performance, RSI, etc.) managed by specific advisers. The first sub-fund considered for launching is “Absolute return” with NewAlpha AM as foreseen adviser. NewAlpha AM has received several awards as best seeding platform and for its seeded funds.  

The launching of Emergence is planned for September 2011 with a final closing second quarter 2012. The targeted assets for the first sub-fund range from EUR 150 to 250 million.  

This initiative - sponsored by Finance Innovation chaired by Georges Pauget with the support of the French Asset Management Association (AFG) and Paris Europlace - is conducted by Alain Leclair, Honorary President, AFG.  
 
Emergence will play a role in the European restructuring business and increased competition. “This Emerging manager concept presents an interesting business model and is gaining importance worldwide among a wide variety of investors,” says Jean-François Bay, Managing Director.  

Gide Loyrette Nouel, legal adviser, and PWC Sellam, external auditor, have established the legal and fiscal structure of the fund, which has been submitted to the French regulator, Autorité des marchés financiers (AMF). The GLN team was comprised of partner Stéphane Puel, assisted by associates Antoine Sarailler and Caroline Hergott from the GLN's Investment Funds team.