For Franck Hervé, Director of Development at Varenne Capital Partners, Belgium will be the second domestic market of the French group in the coming years with the distribution of two funds: Varenne Global and Varenne Valeur. He also highlights Varenne's unique management style, which is based on four performance drivers, and which should enable it to limit risks in the event of a market downturn and to capture all or part of the market upside.
 Franck Hervé |
The French asset manager, which employs 36 people including 15 managers, currently has €3.7 billion under management with net inflows in 2021 of €970 million. "We have experienced strong growth over the past three years, thanks to the solid track record of our funds, our intensified commercial efforts and our unique management style," explains Franck. In Belgium, the group already manages EUR 400 million and this year has raised around EUR 120 million. In Belgium, our funds are mostly sold under Branch 23 products thanks to partnerships with One Life, Baloise or Vitis among others. In addition, major banks have included our funds in their funds of funds, and various family offices also offer our products. In order to accelerate our development in Europe in general and in Belgium in particular, we plan to transfer the assets of the French funds into compartments of a Luxembourg SICAV in the first quarter. Finally, to support our strong growth, we are continuing our policy of strengthening our teams by recruiting new profiles to reinforce our organisation.
Franck Hervé points out that Varenne Capital has a unique management style, as all the funds managed by Varenne Capital operate with four independent engines, managed by a dedicated management team, each of which can generate a return on its own. This assembly is based on the central idea of seizing opportunities, on the one hand, and hedging risks on the other, by managing them separately and regardless of market conditions. To do this, Varenne Capital relies on the Long Equity pocket, which is the foundation of our management, and is always present in our funds. To this, we have added three decorrelation and hedging strategies: the first is the Short Equity pocket, which we activate only if the environment is favourable and opportunities are identified so as to generate performance for the funds and not to hedge them from their long pocket. The second decorrelation strategy is for special situations such as M&A arbitrage or major capital restructuring. These are mergers or acquisitions where the deals are announced and friendly. ''
Furthermore, we do not want to lose money on this strategy, which is intended to finance all or part of the budget of the last strategy: the macroeconomic hedging strategy or Tail Risk Hedging. Its objective is to hedge the residual risks of the long equity pocket and for this we allocate a budget of 1.5% per year per fund to hedge our portfolio against scenarios that could undermine our investment thesis on the long equity pocket.
Two funds on the Belgian market
Two UCITS funds are currently available on the Belgian market, Varenne Valeur and Varenne Global, both managed with our four strategies, Varenne Global is more dynamic than Varenne Valeur as its exposure to the long equity pocket is higher, as this fund is more exposed, its notional hedge will be higher. However, both funds have the same investment universe, i.e. all developed countries. Franck also emphasises that no investments are made in emerging markets.
In conclusion, Franck Hervé reminds us that the objective of the management is to generate excellent performance over time with the minimum risk necessary to obtain it, in different market configurations.
