Advertisement ::

Enlarge Cartoon

Armed hedges, in France

Geneva, Switzerland (GenevaLunch) - Unigestion, a Geneva-based asset manager specializing in alternative investments like hedge funds, has opened an office in Paris, France in order to be able to offer its clients a fund that is not Swiss. Chief executive officer Patrick Fenal says in an interview with Bloomberg 21 October that Unigestion lost a mandate from a potential client because the company is Swiss. The new fund is managed by a French team in Paris and is registered in France.

Most Swiss private banks are already present in the major European Union financial centres, and can market their own funds to EU citizens directly. A source at Lombard Odier Darier Hentsch, a Geneva private bank, told GenevaLunch that he did not see how Unigestion’s move could improve its marketing success with clients, except for the one potential client, already lost.

Unigestion currently manages 34 investment funds, many of which are registered in Guernsey, one of the Channel Islands. These funds may not be actively marketed in Switzerland because they have not been registered with the Swiss Financial Markets Supervisory Authority (Finma). They are thus only for clients abroad, or foreign clients with an account with Unigestion. It is unlikely that other Swiss banks would risk selling these funds even to their foreign clients, unless the written order to buy clearly originated outside of Switzerland.

The other funds managed and marketed by Unigestion are registered for sale in Switzerland and specific European Union countries, which means that a citizen of one of those countries can ask his local bank to buy the fund from Unigestion.

In the article, Bloomberg says that there are moves by the European Commission to restrict the sale of investment funds within Europe to managers actually domiciled in an EU country, thus excluding Switzerland, which is not a member of the EU. This would increase costs enormously to the funds’ managers who would have to set up a structure like the one at Unigestion in Paris. It would also reduce Geneva’s new-found popularity with London-based hedge fund managers, many of whom have already moved to Geneva or are considering the move.

Background: “Hedge fund manager Brevan Howard may move to Geneva“, 29 September 2009, GenevaLunch