Couvrecelle, a former chairman of the board of Edmond de Rothschild Asset Management and partner Jean Maunoury, set up IM Square in June. The firm’s founding shareholders include Amundi, Eurazeo and La Maison.
“It is important that we include a strong partner in Asia to help us develop in this region,” he said.
Discussions are with a “powerful” Chinese institution, he said, but declined to provide further details.
The Chinese shareholder, if signed on as a partner, would also invest in IM Square like its other three shareholders who together have committed €40m euros ($43.3) to finance the platform’s initial investments.
IM Square’s business model revolves around acquiring minority stakes in entrepreneurial asset management companies in the US, Europe and Asia and then helping them to grow their business offshore.
“We take a minority stake in asset management boutiques. We don’t want to control them, but just support them in their expansion outside their domestic markets,” Couvrecelle told Fund Selector Asia.
Looking for boutiques
The firm hunts for entrepreneurial fund houses that are already mature, profitable and recognised in their local markets. They need to manage assets worth $1bn – $15bn in traditional and liquid asset classes, and offer high growth potential.
Couvrecelle said the firm has been working on a pipeline of potential investments for the last 18 months and is close to making its first investment later this year.
From a universe of 1,000 asset managers, a few dozen have been identified.
“A large part of them are from the US market and we are in very close negotiations with a few of them. We expect to invest in one US boutique before the end of this year,” said Couvrecelle.
The firm is also open to investing in Asian boutique firms, he added.
“The first step is to invite a Chinese shareholder to join IM Square. When we succeed in that, we will look for an Asian boutique.”
The platform aims to invest a minimum of €250m euros within the next two to four years, he said.
West to East
IM Square also targets US and European boutique fund houses that are interested in growing their businesses through the private banking network in Asia.
“The private banking market in places like Singapore is active and they [boutiques] would like to expand there in the short-term.
“In the medium- or long-term, they are interested with Chinese markets, but China is not very open to foreign products today.
“[However], having a Chinese partner will be a great help when this huge market opens to non-domestic equity products.”