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The firm has decided to migrate an existing capability in running Hong Kong and China equities from Paris to Hong Kong and has begun to market its suite of global strategies û both long-only and alternative û to institutional investors in Asia, says Philippe Couvrecelle, Paris-based chairman of the board.
LCF Rothschild Group has two businesses, asset management and private banking, based in Paris, Geneva and London, managing around Ç100 billion ($152 billion), including Ç12 billion in funds of hedge funds. It is run independently of NM Rothschild & Sons, the London-based arm of the family that handles investment banking and advisory services.
For the past year, one part of LCF Rothschild Group, Paris-based La Compagnie FinanciFre (LCF) Edmond de Rothschild, has planned to expand to Asia and diversify its mainly European client base. It also felt its Asian equities products would benefit from being closer to investee companies û something of a departure for the firm, which until now has centralised its investment expertise at the head office.
Tang Yi, who had run the China equities portfolio from Paris, has recently relocated to Hong Kong to oversee both the investments as well as to manage the Asia business, including building relationships with potential investors and distributors. The firm decided to make Hong Kong its base thanks to its proximity to the companies owned by its portfolios and to potential clients.
ôRothschild group is nearly three centuries old but we are very new to Asia,ö says Couvrecelle.
The firmÆs products are organised around 12 autonomous teams of portfolio managers, such as TangÆs China equities unit. The firm has no central CIO but it does group its investments into three broad categories û European equities, international ex-European equities and global asset allocation û that it can use to engineer structures or exposures on a bespoke basis.
The firm has managed Chinese/Hong Kong equities since 1992, and the private bank has an existing rep office in Shanghai. LCF Edmond de Rothschild was also the first private bank to get a QFII license.
Now the plan is to not only run long-only portfolios of A- and H-shares and such, but to develop a long/short and small-cap capability in Hong Kong. The firm is piloting its first long/short fund (for European equities) in Paris but has yet to market it. For now its other Asia-focused strategies, including Indian equities and pan-Asian equities, will remain in France, as will the research teams behind its funds of hedge funds.
Rothschild will begin marketing in Asia on the basis of its Hong Kong/China products, which it says have a good track record, but will also roll out its global products managed from Europe, including products designed to help clients diversify out of dollars or higher-yielding dividend equity funds.
ôOur first challenge is to win a mandate from a sovereign wealth fund or major institutional investors from North Asia in the next two or three years,ö Couvrecelle says. ôSecond is to partner with private banks in Hong Kong, and third is to develop the Hong Kong team.ö
The firm is looking for analysts, with a view to promote them to portfolio managers; salespeople; and dealers. Much of its IT and compliance will leverage the Paris infrastructure.
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