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Credit Lyonnais Looks To Hedge Funds With Acquisition Of French Fund Manager

Philip Morton, Investors Offshore.com, London

01 February 2001

Credit Lyonnais (CL), the French banking group which also provides asset management services to individuals and institutions, has latched on to the boom in hedge fund investing by taking a majority holding in a new hedge fund manager, Systeia Capital. The deal is likely to boost the number of hedge funds available to French investors.

Via its asset management subsidiary, CL has taken a 78 per cent stake in Systeia Capital Management, which was formed recently and plans to launch a range of offshore funds encompassing traditional futures and long-short hedge funds. There is even a fund planned which will invest in derivatives based on the weather.

Commenting on the acquisition in the Financial Times, Alain Papiasse, a CL director, said the deal completed the bank's range of investment products and would be more profitable than ordinary fund management. He was quoted as saying: 'It can be as profitable with a much lower level of assets than traditional asset management....this is a growth market.'

CL has chosen to go down the route of buying a fund manager rather than selling funds for other providers. Mr Papiasse stated: 'There is no way we can put our relationships with customers at risk. We can only sell products we believe in.'

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