ABC arbitrage: over 20 years of innovation process
Founded in 1995, ABC arbitrage was originally a project launched by a team of market professionals to apply their know-how to financial arbitrage and to structure their activity through constant creativity and responsiveness. The company has constantly grown and improved its performance over the last 21 years.
Take a look at its successful record and its vision of the future.
Founded in 1995, ABC arbitrage was originally a project launched by a team of market professionals to apply their know-how to financial arbitrage and to structure their activity through constant creativity and responsiveness. At the beginning, ABC arbitrage focused its development on selling its expertise as a consultancy to institutional investors, thus ensuring an initial flow of recurrent revenues to build up its capital base. ABC arbitrage generated profits as of its first fiscal year.
As of 1997, ABC arbitrage began to invest its own assets in different markets in Europe and in the US.
Beginning with the 1999 fiscal year, investment of its own assets generated the majority of its operating earnings. On February, 1999, ABC arbitrage was listed on the “Marché Libre”, Euronext Paris.
In 2001, ABC arbitrage reinforced its organization to optimize performance. To that end, it created a corporate governance structure in March 2001 to oversee operations in the interest of its shareholders.
The company also implemented its own compensation scheme and social policies, rewarding professional expertise and encouraging entrepreneurial initiatives.
On February 13, 2003, ABC arbitrage successfully transferred its assets to the “Second Marché”, Euronext Paris.
During this period, the group demonstrated the relevance of its organization and the flexibility and quality of its approach, capable of responding to all market developments and of facing increased competition. This generated request from outside investors, interested in benefiting from its expertise and proven track record, enabling ABC arbitrage to develop a major project for third party asset management services.
To this end, the group set up ABC arbitrage Asset Management, approved by the Autorité des Marchés Financiers (AMF – French stock market authority), thus allowing the company to commercialize its know-how and manage assets for outside investors.
ABC arbitrage implemented its “Horizon 2010” project in 2006. The main feature of this profitsharing scheme was to distribute bonuses and stock-options on the basis of ambitious and confirmed results achieved over a five-year period (EUR 100 million). Through this program, ABC arbitrage has implemented a high incentive mechanism to foster a true convergence of interests between shareholders and staff, to undertake forwardlooking projects and ensure the company’s sustained growth and development.
In 2007, ABC arbitrage Asset Management extended its offer for third party asset management, by creating its first Irish-based alternative investment fund, open to qualified investors.
In 2008 and 2009, ABC arbitrage group generated record profits.
ABC arbitrage surpassed its “Horizon 2010” goals one year ahead of schedule, with cumulated net earnings of €106 million in 2006 to 2009.
ABC arbitrage’s human resources policy was rewarded with an Étoile Capella by Ethifinance, recognizing the company’s ability in the areas of recruitment, management and employee loyalty. The company was also granted an Étoile Sirius for its Global Performance, recognizing its governance and socially-responsible policies.
The group’s creative and innovative communication policies were rewarded with a Grand Prix attributed by UJJEF, for its 2008 annual report and with the STRATEGIES Design Award for the 2009 annual report.
Having moved into new offices in the rue du Quatre Septembre in the heart of the Paris financial district, the group now has state-of-the-art facilities to enable it to boost performance and, in particular to launch new third-party investment funds and to launch its “Horizon 2015” program.
ABC arbitrage continues to implement policies to motivate its teams, to foster innovation and to build shareholder confidence, thus enabling it to develop new and ambitious programs and to maintain the momentum it has built up since 1995.
In 2013, faced with this radical change in the markets, ABC arbitrage laid the foundations for a new growth plan, Ambition 2016, which aims to deliver an aggregate €90m of net income over the period 2014 to 2016. There are four main pillars to the plan: staff (new people, mainly quantitative researchers and IT developers, either junior or more experienced); geographical expansion (to preserve competitiveness and meet both the needs of financial partners and regulatory requirements); innovation (ongoing development of the Group's expertise); asset management (develop a range of diversified investment funds).
Ambition 2016 aims to rebuild business momentum in alignment with the new market paradigm. While not completely freeing the group from the economic environment, Ambition 2016 will enable ABC arbitrage to capitalise fully on future opportunities. The group plans to consolidate its position as a leading player in alternative investment, recognised for its high-quality performance, with a focus on profitability and value creation.