ADI Alternative Investments has become one of the first hedge fund managers in France to secure an Agr Rgles d’Investissement Allges, Effet de Levier (ARIA EL) that allows it to distribute its funds to retail and institutional investors in France.
According to Crdit Suisse First Boston (CSFB), which is acting as prime broker to the fund, and Crdit Agricole Investor Services (CA-IS), which is acting as fund administrator, the regulatory approval represents a significant step forward in the French alternative investment industry, as this new type of fund is now authorised for public distribution to both institutional and retail investors meeting the required qualifications.
The two banks say the approval is the result of months of intense work among the various parties – ADI Alternative Investments, CSFB and CA-IS – to set up the legal and operational structure linking the funds, the depositary bank/fund administrator and the prime broker.
ADI Alternative Investments obtained from the AMF one of the first ARIA EL agreements, demonstrating their pioneering role in the alternative investment industry in France. Based on their onshore and offshore expertise in alternative investment strategies, ADI Alternative Investments strongly contributed to the success of this venture, playing a key role in the coordination of the project and the resolution of the legal, operational and regulatory issues, say the two banks.
CSFB, a long-term business partner with ADI, has by this approval become the first prime broker to a leveraged French onshore hedge fund. It will provide leverage, securities lending, portfolio swaps and reporting.
“CSFB is delighted to be the pioneer in prime brokerage to the new French onshore market,” says Muriel Danis, Vice-President in Prime Services at Credit Suisse First Boston. “It is the result of a great deal of work, innovation and perseverance among the three project partners, ADI, CA-IS and CSFB, in liaison with the AMF. This puts us in a truly unique position and we look forward to working in close partnership with future onshore hedge funds.”
CA-IS says it has more than Euros 470 billion of assets under administration and Euros 61 billion of assets in alternative investment and structured products. It services hedge funds from both Luxembourg and Dublin.
“To succeed in this initiative, we extended our automated processes to CSFB,” says Amina Oulmi, project manager at CA-IS. “Automated processes were already in place linking the management company, the fund administrator CA-IS Fastnet and the depositary bank CA-IS Bank, ensuring a smooth and secure environment. Our team is now ready to develop this market, for which we foresee rapid growth in the coming months”
All three parties welcomed the AMF’s pragmatic approach, which they say has resulted in a flexible alternative investment product within a new regulatory framework. “The set up of this new regulatory body should favour the development of the alternative investment market to a new type of clientele in France, but also abroad,” says Alain Reinhold, Managing Director of ADI Alternative Investments.