French Hedge Funds
Hedge Funds Hope for "French Revolution" of Investors
France's hedge fund managers have been characterized as "risk-addicted buccaneers" and French institutional investors have been less open to risk than their peers abroad. This combination has made it difficult for France's hedge fund industry to thrive and hard for managers to attract capital from local investors. But these fund managers are hoping for a new "French Revolution" where more French assets go to hedge funds than in previous years.
It is a Europe-wide trend but one that matters in France, where big investors such as insurers and retirement funds - holding 2 trillion euros ($2.5 trillion) assets - are more risk-averse and put less into hedge funds than peers abroad.
The optimism of some hedge fund managers is even trumping fears for the future of French finance under Socialist President Francois Hollande, who has pledged to tax top earners more and crack down on risky trading.
"More French assets are going to go to the hedge funds. It is inevitable," said Amit Shabi, co-founder of Bernheim Dreyfus, a fund that makes bets on whether mergers succeed or fail. "The only question is how long it takes. It may be one year or five."
Although the 2008 crisis and ensuing euro zone debt turmoil have left their share of hedge fund victims by the wayside, Shabi and co-founder Lionel Melka said that in a world of rock-bottom interest rates, rough stock markets and a flight to sovereign safety, hedge funds' risk-return image was improving. Source
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