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This fund manager conquered Europe; have you heard of him?
by Philip Haddon on Apr 23, 2010 at 11:16
Fund investors on the continent would be shocked to learn that Europe’s most talked about, and best-selling, fund manager still remains largely unknown in the UK.
But this could be about to change as veteran investor Edouard Carmignac (pictured) and his firm, Carmignac Gestion, has the UK in its sights.
From his palatial offices opposite the Place Vendôme in Paris, polo-playing Carmignac has overseen his boutique firm’s meteoric rise in the past decade.
He founded Carmignac Gestion in 1989, but for the first 13 years the firm grew slowly. By 2002 its assets under management were just €797 million (£698 million), but then it all changed. By the end of 2008 the firm had €12.7 billion and at the end of 2009 it had ballooned to a staggering €33.3 billion.
These assets are spread across 19 funds, but the main driver of growth has been the flagship €20 billion Carmignac Patrimoine fund, a mixed asset vehicle run by Carmignac himself alongside Rose Ouahba and Frédéric Leroux, which has returned 60% in the past five years and 541% since its launch in 1989.
Carmignac also runs the firm’s €6 billion global equity fund Investissement, which has delivered 90% in five years, while the MSCI World index has risen just 13%.
With both his funds, Carmignac has shown an uncanny knack for getting the major asset allocation calls spot on.
‘We have a direct line to God,’ Carmignac jokes, as an explanation for his success rate. ‘It’s not a question of identifying the trends, it is having the chutzpah to go after them.’
He explains it was not just in the past decade that he was investing in the right places at the right times – in the 1990s he was an early investor in the tech story, getting out before the bubble burst. In 1997 he launched an emerging markets fund and in 2002 he had a rebalancing across his funds which saw him benefit greatly from the emerging market growth story of the noughties.
Perhaps inevitably, Carmignac has had more than his fair share of detractors over the past year. It was not uncommon in 2009 to hear representatives of rival firms all over Europe and the UK questioning Carmignac’s ability to cope with his rapidly ballooning assets, and the whispers came to a head in Spain when leading bank BBVA removed Carmignac’s funds from its private banking recommendation lists in October. This caused some Spanish investors to panic sell their positions.
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