IRELAND - The Bank of Ireland group has announced it set to acquire New York based fund of hedge fund Guggenheim Alternative Asset Management, to add to its stable of asset managers.
Guggenheim currently manages around $2.8bn, half of which derives from institutional investors. Bank of Ireland have insisted the acquisition will not operate in competition with its two other asset managers, Iridian Asset Management and Bank of Ireland Asset Management, which has seen significant recent outflows.
The group has entered into an agreement to acquire 71.5% of Guggenheim, for around US$184 million. The exact amount will depend on Guggenheim’s performance to 1 April 2006. The transaction is expected to close at the end of January 2006, subject to regulatory approvals.
Kevin Dolan, chief executive of BIAM, said the key reason behind the acquisition of Guggenheim was that the fund insisted on a higher level of transparency from the hedge funds it invested in then other fund of funds. He admitted this could mean that’s some high performing “black box” hedge funds would be excluded from the portfolio.
He explained: “A lot of hedge funds have seen significant outflows recently and what Guggenheim offers is institutional money which is by its nature stickier. Also if we are able to commit substantial funds to a single hedge fund then they will become much more flexible in terms of transparency.”
He refused to set any growth targets for the new acquisition but said the current management would continue to run the fund and would make calls on issue such as future capacity constraint.
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