The group focuses on the development of exclusive arbitrage strategies, applying a selective opportunity-driven business model.
Its main goal is to produce high levels of profitability every year and to ensure sustainable growth. Since its creation in 1995, ABC arbitrage has benefited from the diversity of new financial markets and an abundance of products. The group firmly believes that this trend will continue to provide the arbitrage business with new fields of endeavour and growth opportunities.
ABC arbitrage group performance
|ABCA gross return on equity||87%||109%||65%||50%||50%||32%|
|ABCA return on equity (ROE)||37%||52%||32%||25%||25%||17%|
|DJCS/Core HF Index||13%||(19)%||19%||11%||(3)%||8%|
ABC arbitrage group develops three main activities
ABC arbitrage, the group’s parent company, is ABC arbitrage Asset Management’s main client.
Each year ABC arbitrage invested part of its funds in the groups’ alternative investment funds with the remainder managed under mandate.
Asset management for third parties is exclusively based on arbitrage operations and negotiable securities which can be traded on the majority of regulated markets. On the basis of its risk-management principles, ABC arbitrage Asset Management trades exclusively in securities with a sufficient degree of liquidity and appropriate market capitalization, in line with the arbitrage strategy being deployed.
ABC arbitrage Asset Management, the unlisted and wholly-owned subsidiary of ABC arbitrage, has an asset management license from the AMF, enabling it:
- to manage funds on behalf of qualified investors under third party mandates.
- to propose and manage foreign investment funds.
The goal of these investment funds, which manage some of the arbitrage strategies successfully developed by the group since 1995, is to generate returns that are independent of market trends.
These funds, which are not available in France, are housed within ABCA Funds Ireland Plc and are offered only to qualifying investors as defined by the Irish Financial Regulator (see section "Structure").
The recommended minimum subscription is €5 million, although the fund only offers one type of unit for which the regulatory minimum subscription is €1 million.
Based on performances and on possibilities, as defined by the regulatory framework, ABC arbitrage Asset Management could create new funds to deploy other arbitrage strategies (Irish funds or French contractual funds).
While recalling that recent regulations in this field have seen a great number of changes, the group is gradually pursuing its development project for third-party asset management in line with its initial policies, i.e. without haste and above all preserving its track record of consistent profitability.
With its established expertise in financial markets, the group is also in a position to propose financial engineering consulting services for third party institutional clients or qualified investors.
However, ABC arbitrage has no immediate plans to develop sales of its arbitrage know-how on an advisory basis or to widen its client base. These initiatives are done on an ad hoc basis and are not a major area of growth for the group.