Proxima: The Joint Venture Between Vega Asset Management & BBVA
Vega Asset Management holds a place as one of the largest hedge-fund firms all over the world. Its alliance with Spanish bank Banco Bilbao Vizcava (BBVA), which is second largest bank of Spain, resulted into joint venture i.e. Proxima, of worth $3 billion in the year 2006. This venture was meant to support to startup managers in alternative investment industry worth $1 trillion.
From the time of its foundation in 1996, Vega has established itself as one of the most substantial and renowned managers in the alternative investment industry. It has its offices in Madrid, London and New York. More than 500 institutions across the globe make investments in Vega.
BBVA, on the other hand, has also acquired a place among the top most banking groups in Europe and it had a total market value of €58.5 billion with total assets of €392 billion and above 35 million customers at the time of alliance.
In this alliance, BBVA had 51 percent of the venture which was referred as Proxima Alfa Investments and were operated under the new Spanish regulatory code while maintaining the foremost standard of transparency and corporate governance. On the other hand, Vega owned the rest and the venture contributed to the VegaPlus business line which is a self-dependent hedge fund with $2 billion assets and investment in 10 funds. This new venture Proxima got the benefits of most advanced technology and risk control systems of both Vega and BBVA.
This venture i.e. Proxima enabled BBVA and Vega to provide alternative investments to meet the requirements of investors in the markets across the globe. This new company was registered in Spain and branch offices were set up in London and New York. However, this alliance was the first of its kind as far as partnerships between a banking group and a self-dependent alternative investment manager.
Alternative management is considered as an indispensable asset management tool of the times, thus, this alliance was kind of an opportunity for both companies to move ahead of the market. The new company allowed them to provide domestic as well as international customers’ access to markets all over the world with the help of the most sophisticated and innovative solutions. The complete alternative management value chain in terms of product range and their international distribution could be encompassed by BBVA.
No doubt, global investment industry was a rapidly growing and highly competitive business at the time the alliance took place. There was a huge demand of high-quality products with unique features among the investors. Moreover, the investors were looking for access to top experts in a protected environment possessing best control systems in the industry. Thus, the venture between Vega Asset Management and BBVA was considered as an ideal solution.
Mr. Barreiro was the first chairman of Proxima and its initial assets amounted to $3 billion and 10 early stage hedge funds. It had team of 30 experienced professionals of alternative investment industry.
The most prominent aspect of this venture was to keep control over operational as well as market risk by utilizing the developed technology of Vega and BBVA.