The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:A European Smart Beta Pioneer Enters the U.S. Mutual Fund Biz Not Rated 5.0 Email Routing List Email & Route  Print Print
Monday, August 29, 2016

A European Smart Beta Pioneer Enters the U.S. Mutual Fund Biz

Reported by Neil Anderson, Managing Editor

An 11-year-old institutional asset manager in Europe is preparing to enter the U.S. mutual fund business.

Yves Choueifaty
Paris, France-based TOBAM has filed to launch the TOBAM Emerging Markets Fund, which will be TOBAM's first mutual fund for distribution in the U.S. TOBAM (short for "Think Out of the Box Asset Management"), founded and led by founder and chief investment officer Yves Choueifaty, runs only one strategy, known as the anti-benchmark strategy or "the most diversified portfolio," and then applies that strategy in different investing universes (for example, emerging markets, in the case of TOBAM's planned first U.S. mutual fund).

"Everybody in this industry talks about diversification, yet it's not a well-defined term," Choueifaty tells MFWire. "There is no measure for diversification. This is what I have invented and patented across the world."

And striving to maximize that measure of diversification is how Choueifaty and his team can "try to build the most diversified portfolio" they can build.

Choueifaty says that expanding TOBAM's reach in the U.S. is a key part of TOBAM's growth strategy. TOBAM had $8.7 billion in AUM as of June 2016, including $2.5 billion from institutional investors in the Americas. TOBAM's AUM has doubled in three years, from $4.3 billion in June 2013, when it had just $300 million in AUM from the Americas.

In terms of mutual funds, TOBAM already offers 10 funds based in Luxembourg, as well as mutual funds (some TOBAM's, some subadvised by TOBAM) in Canada, Japan, and Korea. In Canada, TOBAM teams up with Mackenzie, and in Asia and the Middle East Amundi helps out with distribution. In the U.S., Chouteifaty sees the Taft-Hartley market (i.e. union, multiemployer benefit plans) as "one of the first segments of client that" the TOBAM team "will be trying to reach" with the U.S. fund. To go after the Taft-Hartley market, TOBAM has teamed up with McMorgan & Company.

TOBAM plans to offer A shares, C shares, and I shares of the new fund. BNY Mellon will handle custody and transfer agency, Pepper Hamilton will provide legal counsel, Ernst & Young is the independent accounting firm, and Foreside is the distributor.

TOBAM already has five people in North America, one in Toronto and four in New York. TOBAM has 43 people worldwide, up from 30 a year ago, and it has offices in Dublin, Hong Kong, and Zurich (in addition to New York, Paris, and Toronto).

Choueifaty, former CEO of Credit Lyonnais Asset Management, founded TOBAM in 2005. TOBAM became part of Lehman Brothers in 2006 and Choueifaty led quantitative asset management in Europe for Lehman. Yet he bought TOBAM back in 2008, and TOBAM's employees still own 80 percent of the company today. Giant California public pension fund CalPERS, TOBAM's largest client, owns eight percent of the asset manager, and European asset management titan Amundi owns the remaining 12 percent.

From the beginning, Choueifaty says, TOBAM started out focused on serving very large, public institutions, such as sovereign wealth funds, sovereign banks, and public pensions. Then they started developing more retail products and partnerships around the world for smaller institutions and wealth management. The TOBAM team develops and tests new offerings outside the U.S., then brings them here.

"The U.S. business in general is really the most strategic part of our business," with "the strongest growth," Choueifaty says. "We have a pipeline which is extremely strong." 

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2024: Q3Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use