Ardian is the premium private investment company that was adopted from AXA Private Equity. It is the biggest global leader in the investment sector and provides worldwide clients with a variety of investment options (Ardian, 2013). Established on its sponsorship programs, Adrian has created its own endowment fund to finance projects such as education, culture and social entrepreneurship in France. Adrian has a project of over 100,000 euros with Cass’s research center to offer student scholarships. Ardian is currently working with CLS, a company that provides satellites for environmental monitoring and tracking. Ardian bought its CLS shares from the a group of French banks. Similarly, Ardian is working with Medtronic corporation, and there are plans for the two mergers to lead to the acquisition of Ardian by the end of the 2015 fiscal year.
The Societe General Security Service (SGSS) is the Bank that offers financial companies, brokers, asset managers and corporate among others range of securities services. These services are based on the current financial market and regulatory trend (Société Générale, 2013). These services include asset management, fund distribution, custody and trustee service among others. The paper focuses on demonstrating whether the two companies can work together. This is done by evaluating the strength of Ardian and investment strategy that the company is adopting. Similarly, we examine the funds that are provided by SGSS, which would attract Ardian into doing business together. Therefore, the paper is about how SGSS could provide a better asset management to Ardian.
Ardian has the capability to quickly invest in the best opportunities offered by the SGSS because it has experience in the investment sector. Ardian understands that the asset management is a symmetric business which keeps on fluctuating due to emerging market equities. For instance, if you decide to invest in the asset management business you should realize that when you are the top performer on the way up, you are going to be the worst on the way down. Therefore, what matters is the right mix for an emerging markets portfolio which include a combination of equities, bonds and hedge funds. Ardian also understands that there is significant value in the emerging market equities because it had such massive returns in the past years. Therefore, investing in the asset management of the SGSS would prove profitable.
Ardian can use the strength of its network in Europe , north America and Asia to invest and manage assets provided by SGSS on on a global scale (Funds of Funds, 2012). Its origins in Europe are another strategy that Ardian can use to invest in SGSS because it can apply to an investment philosophy, which depends on the local presence. Ardian can use local traits and adopts a diverse approach based on the location, the fund and market condition. Another strength of the Ardian is that it can choose direct presence in each market segment it covers and employs its investment teams locally. These investment teams support the companies in the direct portfolio over the long term and offers the resources operationally and financially for external expansion.
Similarly, based on fund of fund business, the strength of Ardian is significantly based on the flexibility of its processes and intensive analysis of the companies in the portfolio of the 800 funds in which it invests (Funds of Funds, 2012). Therefore, organization, discretion and attention to every detail are the main differentiation approaches that Ardian adopts. These approaches enable Ardian to be recognized by the most powerful international investors.
Given the strength of Ardian in the investment sector, SGSS can use the negotiation approach to motivate Adrian to invest in the funds which will be a good strategy because of location. Order to work together and for each party to be satisfied, the two companies should use a negotiation strategy which will arrive at win-win situation. The win-win strategy will make the parties feel not only they have won but also feel contented. This involves negotiations, which aim at striking an agreement in order to resolve any conflict. The win-win strategy will help the parties to achieve mutually beneficial results using the asset management. SGSS will receive the benefits of working together with Ardian such as profit expansion and market expansion among others. On the other hand, Ardian will receive the services such as hedge funds, asset management training at a reasonable price. For example, right mix for an emerging markets portfolio will enable investors to shift their attention to SGSS, where valuation is at negotiable price. The price of emerging market portfolios appear to better for the companies that have liquidity option.
Therefore, the SGSS asset management team is set to better embrace the number of opportunities in the Europe market. Restructuring has given SGSS much more of an integrated capital market approach that sees asset transition from the origination right via to distribution. The company has launched a fixed income, currencies and commodities division which is primarily investor focus such as Ardian. This new division includes an integrated financial engineering approach and strengthened flow and structured product distribution such as asset management.
SGSS as the asset management team, which provide investors with the opportunity and distribution of unsecured bonds across all segments. SGSS has created a leveraged capital markets syndicate, which aims at delivering structure and distribution capabilities for leverage loans and high yield bonds. The company has hired head of leveraged capital markets Spain and Portugal to lead its team. This will help the company to provide dealing services on an agency basis to various companies. Similarly, the alignment of the asset management team is meant to support the growth with its European securitization focus (Will 12). The company offers portfolio management, hedge funds and investment products such as transferable securities. The SGSS finance business has grown dramatically over the past years and the company expects that it will continue to grow.
On the exit strategies, the company is adopting real estate investment, which focuses on deals that will emerge from its continental platform. Moreover, the SGSS has won the bid of the consultation process which provide trustee services for eight venture capital funds totaling more than three billion euro. This has enabled the company to expand its securities processing services in Europe. The company will leverage its network of regional retail banks and use the network as the base to offer local custody services. These plans were motivated by demands from customers looking to add domestic business and business which is inbound and outbound.
Moreover, SGSS has consolidated onshore gilt and corporate bond fund that ranges into a single portfolio. It has blended its index linked, long dated gilt and sterling bond funds within the fixed income range to the SGSS Gilt. The firm has also merged its euro and European special opportunities portfolios which create the SGSS continental Europe equity fund (Will 24). SGSS is expected to continue its policy of launching innovative products and services that help to attract new customer and sustain its existing customers.
The following are the innovations, which SGSS can provide in terms of services
- Expanding processing services in Eastern Europe will help Ardian . SGSS will leverage its network of retail banks and use the network as a base to offer Ardia custody services.
- Innovation of partnership of orient capital. The orient capital will offer Ardian relations services on the behalf SGSS. This is so because SGSS has selected Orient capital due to its capacity to offer investors relations services depending on its share register service.
- SGSS is planning a joint venture by state bank of India to add funds accounting and fund administration services to its line of services, which will benefit Ardian if it opts to invest in mutual funds.
- Therefore, Ardian can be interested to in the SGSS opportunities such as selective acquisitions and divestitures. This opportunity will help Ardian to sustain revenue and profit growth momentum. SGSS has introduced new products and service initiatives, which are likely to improve margins of investors. For instance, Ardian can invest in the SGSS adequity best asset protected fund, which target lower-risk investors. These funds will help Ardian to redeem from and invest in it. The Adequity best asset protected fund offers 100 percent capital protection and provides diversification and access to asset classes (Simon 12).
The SGSS adequity best asset protected fund invests in five market segments which include British equities, property, commodities and hedge funds. The company also intends to target American equities in order to diversify its operations. The Federal reserve’s policies has main the driver of US equities and the reason why stocks are keeping their current levels. On Monday the SGSS equities in America closed at 1676 but toward the end of year SGSS predict the index of about Thus, Ardian can plan to target British equities which matches its approach of direct approach. Ardian will use teams support in the direct portfolio to offer the resources operationally and financially for this external expansion. Ardian will be secure in investing in this fund because it offers 100 percent capital protection. This is so because it offers tactical asset allocation and provides rapid evolving investment proposition.
Moreover, the fund has is secure because it offers full capital protection on the systematic and the downside performance of the upside management. Investing in this fund will enable Ardian an opportunity to earn an enhanced dividend of up 7.5 percent per year (Simon 13). The fund is designed to maximize the performance captured by the investor if they are in a position to make the correct asset allocation. Therefore, given the security of adequity funds and cost, I recommend Ardian to invest SGSS and would realize enhanced dividend of up to 7.5 percent.
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