The chairman of Credit Suisse Group's alternative investments business said that his unit plans an international expansion for the recently acquired Asset Management Finance Corp., using joint ventures to enter new regions and sectors.
The chairman, Brian Finn, said that by early next year Credit Suisse needs to put some Asset Management Finance executives internationally in cities like London or Zurich and eventually in Asia, possibly in Singapore or Hong Kong.
He discussed the plans in an interview Wednesday, a day after the Zurich firm bought 80% of the New York investment manager from National Bank Financial of Canada for $384 million of stock.
Mr. Finn said that he hopes to have some international customers for Asset Management Finance by late next year.
Asset Management Finance provides capital to small asset managers, including investment managers and alternative managers, for a passive, nonvoting, limited-term interest in the manager's future revenues.
Since the company was founded in 2003 it has bought stakes in 12 asset managers with assets of $50 billion collectively.
"We think that there is a big global opportunity," Mr. Finn said. "We want to build this business around the world and we believe we can get there faster than if AMF did this on their own."
Credit Suisse's alternative investments business, which has $157 billion of assets under management, already has some international joint ventures with asset management companies, including Ospraie Management LP of New York; Abu Dhabi Future Energy Co.; Mubadala Development Co. and Gulf Capital Partners (both of Abu Dhabi); China Renaissance Capital Investment; Global Infrastructure Partners, a General Electric Co. unit; and a partnership with a Latin American private-equity investment team in Brazil and Argentina.
"We are very comfortable in emerging markets," Mr. Finn said. "We have developed a lot of joint ventures in Latin America, China, and the Middle East, but as a general matter as we look at investment managers in the U.S., we think the next few deals will be in more-developed markets."
Companies use Asset Management Finance's capital for liquidity, internal equity transfers, acquisitions, management buyouts, and other strategic objectives, Mr. Finn said. He said that the company is worth $450 million and has a strong pipeline of new business.
Its target market includes more than 2,000 small and midsize asset managers with at least five to 10 years of experience and $3 billion to $5 billion of assets under management.
"We will certainly look at that space, but we also want to target some larger managers," Mr. Finn said. "But this is less about large managers and more about broadening the type of managers and the geographies that AMF can target."
Asset Management Finance has focused on long-only managers. Credit Suisse may expand the scope of managers to which AMF provides capital to include hedge fund managers, private-equity managers, and fund of fund managers.
"Asset Management Finance has developed a great deal of brand recognition in the long-only space," Mr. Finn said. "We want to take what they have developed and bring it to the next level."
He said that his unit wants "to develop more minority stakes in independent, boutique managers that have the ability to leverage Credit Suisse's skill and capital in the investment management space."
The unit, which is based in New York, is diversified — with 30 alternative fund families. "That is our strategy, to really have a string of pearls," Mr. Finn said. "We want to manage a lot of little things rather than one flagship fund family."
The unit wants "to be able to play in a lot of different businesses in a lot of different markets where we see great opportunities," he said. "We are happy to take a minority stake. There are a variety of ways to participate in different markets with the Credit Suisse brand and then using joint ventures to fill in everything in between."
Analysts said that most large investment management companies are wary of joint ventures since most prefer the autonomy of total ownership, but Credit Suisse has been successful with them because it has remained selective since completing its first joint venture, three years ago, with China Renaissance.
Mr. Finn said his unit is in no rush to make another acquisition or enter another joint venture.
"There are a lot of people interested in partnerships," he said. "If a manager is strong in a particular region or a particular asset class and they want a partner, they are coming to us. There are a lot of prospects, because few competitors are interested in partnering."
In the past two to three years Credit Suisse's alternative investment business has entered 15 to 17 joint ventures and "turned down 150," Mr. Finn said.
"There is just a really low hit rate for things that meet our criteria," he said. "We could announce two or three deals before the end of 2009 or we could announce none. It all depends on what becomes available."
