Kiernan’s Inflection Point signs $1bn assets joint venture with French funds group

Deal involves cross-holdings and injection of asset advisory money.

Inflection Point Capital Management (IPCM), the sustainable fund manager started by Matthew Kiernan in 2009, has signed a joint venture to start advising on $1bn in assets on behalf of La Française, the €39bn Paris-based funds house, in exchange for a half share in IPCM. Under the deal, La Française will take a 49% stake in IPCM UK, now the main London-based subsidiary of the sustainability manager, while IPCM takes a 49% cross stake in a newly created Paris-based entity called La Française Inflection Point (LFIP). The assets comprise retail and institutional money from La Française. The joint venture will be based in London, with staff in Paris and New York and is recruiting further investment personnel as it builds up its team. The $1bn injection of advisory assets for global equities into IPCM is the first money the firm has won since launch. Inflection Point runs assets based on what it terms “Strategically Aware Investing”, which allies financial research with additional company data around megatrends such as climate change and resources depletion and a focus on identifying better information on corporate management quality and human capital. La Française, which is majority-owned by Crédit Mutuel Nord Europe, the French mutual banking group, is a signatory to the UN-supported PRI, and posits ESG integration as a major pillar in its equity investment strategy. The latest deal is the second it has done with an external ESG-themed manager. In November 2012, La Française took a 20% stake and placed €15m in assets in Cedrus Asset Management, the Paris-based SRI fund-of-funds house.That stake was taken by NExT AM, its fund manager incubation arm. Kiernan, who with former co-partner, Hewson Baltzell, sold Innovest, the ESG research firm, to RiskMetrics Group for $16m in February 2009, is chairman and chief executive of the new joint venture. Paul Clements-Hunt, the former head of the UN Environment Programme Finance Initiative (UNEP FI), who joined Inflection Point Capital Management in an advisory role last year, will stay with the new joint venture as a part-time senior strategic advisor. David Pitt-Watson, former executive chairman of London-based Hermes Focus Asset Management, will also remain as a part-time strategic advisor. Xavier Lépine, Chairman of La Française, commented: “IPCM brings a fresh, dynamic and comprehensive analytical approach to the evolving risk and reward realities of the 21st century. La Française is delighted to have found a strategic partner whose principals have a unique track record of cutting- edge innovation, coupled with investment discipline in the sustainability and responsible investment space. IPCM’s carefully framed concept of Strategically Aware Investing (SAI) is a powerful one for modern markets in a globalised, changing world. Because we are firm believers that tomorrow’s challenges forge today’s convictions, the SAI investment philosophy will be applied to our entire equity fund range.”