Why not but it is really not the purpose of the debateEspecially lately among investment banksHis pen was soaked in a liquid waterproofThe project focuses on the following pointsBut perhaps this is precisely the problemThe spirit of adventure is available he saidThis comes somewhat reduce the total volumeBut for the time being they do have cureThey are significantly lower for radiologists 5The course of 2010 promises to be made hollow and bumpsAfter the Bank financing and investment (BFI), it is the turn of the asset management of the company to be on the front of the stage. After the publication of information by the daily newspaper "Liberation" on a division of alternative management losses, the Bank said have lost EUR 1.2 billion before tax, a portfolio invested in monetary dynamics. It's a portfolio managed by SGAM-AI, an entity dedicated to alternative management, itself in the Société Générale Asset Management (SGAM), and "Release" stated yesterday morning until the end of 2007 that it would have generated losses of EUR 5 billion. Information immediately contradicted by the Bank. The title nevertheless opened down more than 5 yesterday, and lost even more than 3 in the afternoon.
The source of the losses pointed to by the daily is a portfolio of 11.2 billion euros originally managed by SGAM AI and invested in monetary dynamics (European bonds securitized), whose value has been affected by the crisis. To ensure the liquidity of the shares of the Fund to withdrawals from client applications, and then the market had become completely illiquid, the Bank has decided to buy these assets by another division of the Bank, the BFI, early 2008. A procedure commonly used by the banks since the beginning of the crisis. Once transferred to the BFI, the portfolio was reduced from 11.2 to 5.3 billion euros by end of 2008. The balance, i.e. about EUR 6 billion, was the Bank devalued and sold, generating a loss before tax of 1.2 billion euros for the BFI.
Aggressiveness of vendors
In detail, the Bank sold a portion of the assets at market value, so already depreciated, generating an entry of cash of$ 4.8 billion. It total depreciate their value to the tune of EUR 1.2 billion. The average discount applied to the nominal value of the assets is 29. Regarding the 5.3 billion euros still in the balance sheet of the BFI, they have vocation to be depreciated and transferred water.
The woes of SGAM-I illustrate the difficulties of large traditional management companies to create within them the structures of "hedge funds". To be effective, they must have a certain autonomy (strategy, methods of work, the... performance incentive system). Until the crisis, SGAM AI had worked rather well, with an increase of assets to more than 50 billion euros end of 2007, and a high profitability. End of December 2008, the company, which had nearly 350 people, managed only 24.5 billion euros of assets.
According to some observers, the culture of SGAM-I was much closer to that of a Bank of investment and asset management. Many investors have indeed complained aggressiveness of vendors and their total lack of follow-up in relations. Coupled with a system of incentives to risk taking, this culture of the "result" precipitated the loss of the company. The case of the monetary dynamic has had a negative impact on the reputation and image of SGAM, and probably weighed in the decision of the Bank to create a joint venture with Crédit Agricole. Since then, departures, forced or chosen, multiply, at all levels. Philippe brush, Director General of SGAM AI between 2003 and 2008, left try entrepreneurial adventure in DB Alternative Investments. Shortly after, it is Arié Assayag, responsible of the activity "hedge funds", who decided to ride his company with 15 employees, according to "The Forum". Worrying brain drain leakage in a trade that is based on the "grey matter" of its employees.
