A decade of ETF experience

Isabelle Bourcier, head of business development at Ossiam, talks to Joanne Young about how her latest venture builds on over 10 years in the ETF industry

At the end of January, Isabelle Bourcier was appointed head of business development at Ossiam, the ETF subsidiary of Natixis Global Asset Management.

The firm, established in 2009, has yet to launch a fund but is planning its first ETF for early summer.

Building a new business is an experience with which Bourcier has some familiarity. Late last year, Bourcier left Lyxor Asset Management, having acted as global head of ETFs for the provider since the inception of its ETF business in 2001. She says: “Lyxor had no index business at that time, so we started from scratch.”

Bourcier joined Lyxor’s parent firm Société Générale in 1994, where she established her listed products background, dealing with warrants and options.

When the opportunity arose to work on Lyxor’s first ETF, her knowledge of the listing procedure and European regulatory environment, as well as what was needed to ensure liquidity, made her well suited to the task. 

She worked alongside Bruno Poulin, subsequently a founding partner of Ossiam, and Alain Dubois, now chairman of Lyxor, to prepare the fund for Euronext Paris. This included working with the French regulator and negotiating the restrictions that were in place around intraday pricing. 

At the time, regulation prohibited a valuation differential of more than 1.5% between two quotations, a limit the team worried would make volatile markets impossible to deal with. 

The attitude of brokers also proved a stumbling block. “Traditionally, brokers have distributed funds receiving commissions from asset managers, so when we arrived with ETFs, which have no retrocessions, they were not interested,” Bourcier explains. 

“We had to do a lot of mass-marketing, advertising and promotion, because the more articles there were in the press, the more investors were going to brokers and asking about ETFs. In the early days we had to convince brokers to add the product to their offering. We did that through emphasising the liquidity and tradability features.”

Liquidity
The team at SG was initially tasked with readying a fund to track the CAC 40, but Bourcier reveals they soon started talking to other big index providers and working on the launch of several products. This included the Lyxor ETF EuroStoxx 50, which until recently was the biggest ETF in Europe. 

Despite the complications involved, Bourcier says she was convinced the project would prove a success in Europe. “The reason why this industry has been so successful, and continued to collect money even when the market was strained and the rest of the mutual fund industry was seeing net outflows, is that you can get your money out once you need it.”