French asset managers OFI Asset Management and La Française are set to merge their fund incubator subsidiaries in an effort to expand in international markets.
NewAlpha AM is a hedge fund incubator owned by OFI Group, while La Française subsidiary Next AM invests in long-only fund managers and investment advisory firms. Their merger would create a combined entity with 20 staff and 31 active partnerships, which look after a combined €7.2 billion under management, say the companies.
Both units aim to give institutional investors access to innovation in fund management. By seeding early stage hedge fund managers, NewAlpha seeks to give its clients exposure to investment ideas that are not yet established in the market.
In contrast, Next AM allows institutional investors to both seed fund companies and become shareholders in them, an arrangement it calls partnership-seeding. Next AM owns stakes in 12 fund management firms, four investment advisory firms and one distribution company.
OFI Group and La Française say the two incubator units have complementary business models.
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