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Capital Markets

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Categorized | Financial

Rambourg’s Verrazzano aims for $1bn

Posted on February 29, 2012

Verrazzano Capital, the hedge fund manager set up in Paris last year by the former Gartmore star Guillaume Rambourg, is set to launch its first funds on Thursday.

Mr Rambourg has raised day-one commitments of $500m for the vehicles, making Verrazzano one of the largest hedge fund launches in Europe and even worldwide since the financial crisis struck.

Follow-on commitments of $250m more from investors are expected in coming months and many believe Verrazzano will comfortably exceed assets of $1bn under management by the end of the year. Among Mr Rambourg’s investors is Roger Guy, his erstwhile partner at Gartmore.

Though already well-known in hedge fund circles, Mr Rambourg shot to wider prominence in 2010 when Gartmore’s management suspended him for alleged breaches of internal trading rules – triggering a plunge in the firm’s share price and ultimately leading to its downfall as an independent listed company.

Both Gartmore’s investigation and a subsequent external inquiry by the FSA, which froze Mr Rambourg out of the city for 12 months, concluded there was no evidence of wrongdoing. Mr Rambourg and Mr Guy had previously carved a reputation at Gartmore as two of Europe’s most successful hedge fund managers.

Verrazzano, Mr Rambourg’s new venture, has, as a result, been anticipated by investors as one of the most significant European launches in years.

The firm, which will focus on trading European equities from its base off the Champs-Élysées, takes its name from the starting point of the New York Marathon – the Verrazano-Narrows bridge which connects Staten Island and Brooklyn.

In spite of plans for the French government to introduce a tax on transactions in French shares, and much hostility in some quarters to financial services, Mr Rambourg is understood to be pleased with having chosen Paris as a base for his new venture.

Before becoming managing director of the International Monetary Fund, Christine Lagarde, as France’s finance minister, led a move to encourage more asset management start-ups in Paris, launching a seeding platform for emerging managers.

About $400m of external investors’ money is currently split between the main opportunities fund and a smaller, higher risk, focused fund.

Initial investors will pay reduced fees of 1 per cent of their investment and 15 per cent of their profits annually for the lifetime of their holdings in the funds. Verrazzano will charge standard fees of 1.5 per cent and 20 per cent for all new investors.

A prototype version of the funds, which Mr Rambourg has been running to build a track record for the past few months, has already performed strongly.