The poetry of the modern-day showdown lies in the varied personalities and approaches of the leading lights of La Défense and Paris proper.
Tucked into his office at the top end of the Champs Elysées, is Gilles Glicenstein, CEO of BNP Paribas Asset Management.
He cuts a sometimes unusual figure in the flamboyant world of Parisian high finance. With the meticulous attention to detail associated with an ex-financial inspector at the French Ministry of Finance, Mr Glicenstein pores over the profit and loss accounts of his decentralised profit centres, such as newly-acquired hedge fund boutique Fauchier Partners, and recently created third-party fund selection unit CFM.
He is a passionate believer in open architecture, and convinced that a successful financial services house needs to be able to provide every kind of service demanded by its customers. If a fund cannot be manufactured successfully and cost effectively at home, the expertise needs to be bought in from elsewhere.
The bald-headed, highly cerebral, Mr Glicenstein, cannot hide the benevolent manner so appropriate to his post as Professor of Economics at the Paris Dauphine University. He describes asset management as an “art” rather than as an industry. He is well-liked by his staff and has delivered successful asset growth, with funds now nudging ?200bn, and a 39 per cent rise in pre-tax income to ?993m in 2004. But he lacks the aggression, swagger and sense of one-upmanship that is almost de rigueur in the French funds sector.
Since the beginning of the year, he has reported directly to Alain Papiasse, installed by BNP Paribas as the bank’s executive committee member responsible for all asset gathering activities and back office services. The appointment of Mr Papiasse, as a sort of super sales chief, signals the end of the bear market and a new era of growth. Mr Papiasse comes from the more aggressive investment banking world, having been chief operating officer at Calyon. With this new structure in place, even the mild-mannered Mr Glicenstein is beginning to talk tough, predicting another five acquisitions by the end of the decade.
Just a few miles north, across the Seine, one enters La Défense, the concrete and glass kingdom of Philippe Collas, chief executive officer of Société Générale Asset Management. He has an altogether more rumbustious approach to asset management, happy to find fault with both the competition and those distributors who demand excessive retrocession fees. But this is combined with an air of continental sophistication, which leads him to be idolised and imitated by younger staff looking to make their mark in the glamourous French investment sphere.
SGAM talks about its fund managers as a “factory”, distributors as running “warehouses”, and Mr Collas expects his “producers” to beat their benchmarks 85 per cent of the time, which they are currently doing. But Mr Collas is also proud that the majority of SGAM’s ?264bn under management, including ?27bn of net sales in 2004, is being deployed in internally managed products.
Mr Collas denies that BNP Paribas is a serious rival, yet obviously sees them as a threat, as he is almost too keen to shoot their strategy full of holes. He talks about BNP “having given up” management of US and Asian equities, in favour of sub-contracting these strategies, and makes the point that these core skills are still available in-house at SGAM.
Of course SGAM is well ahead of BNP in terms of assets under management. BNP Paribas does have a stronger private banking franchise, with ?95bn in fee-paying assets, playing ?45bn at SG, according to figures from Scorpio Partnership. But tellingly, SG’s private client assets are growing at over 30 per cent per year, and this is fast becoming one of the most profitable and competitive battlegrounds.
BNP Paribas has had a strong grip over the European securities services space, since its purchase of the Cogent fund administration brand from AMP in 2002. But this is another area where Mr Collas hopes to put up a fight, to back his claim that Europe does not yet boast a single credible cross-border, back-office provider.
There is also a third man about to enter the fray, but he is not a newcomer. Daniel Roy, CEO of Natexis Asset Management, owned by the Banque Populaire group, has been there once before, when he headed up CDC Ixis Asset Management. But when the retail oriented banking group, Caisse D’Epargne took over Ixis, which runs more than ?300bn in 2003, Mr Roy, who wants to play the institutional game, began to look elsewhere.
He runs just over ?83bn in his new role, and claims the business is about profitability and performance rather than size. But everything about Mr Roy – his vigorous business manner, his forthright statements and his international outlook – talks about a sleeping giant. From the window of his office, on the quayside behind the Gare de Lyon railway station, he has a clear view of the Ixis building in Montparnasse.
He does not speak about his old employers, but ex-colleagues say there are scores to be settled. And the glint in his eye suggests Mr Roy may be playing with the big boys again soon.
Yuri Bender, editor-in-chief
yuri.bender@ft.com
