Bank of Ireland Group has agreed to acquire 71.5 percent of New York-based hedge of hedge fund manager Guggenheim Alternative Asset Management (GAAM). The deal is worth an estimated $184 million with the exact cash consideration to be determined based on GAAM's performance through March 2006.
GAAM management will retain 11 percent of the business, with its parent company Guggenheim Partners holding 17.5 percent. The transaction is expected to close at the end of January 2006.
The purchase is part of Bank of Ireland's strategy to grow its portfolio of niche, skill-based businesses and expand its Asset Management Services division. The Bank believes that GAAM's investment performance, stringent risk controls and transparency will appeal to institutional investors.
"Our Asset Management Services division is an important part of our Group. Over the last decade, we have built a significant international distribution capability, which delivers investment solutions to institutional investors and their consultants. Our strategy is to harness this capability to provide an enhanced range of investment solutions in the future," explained Brian Goggin, chief executive of Bank of Ireland Group, in a release.
"The acquisition of Guggenheim Alternative Asset Management is a further step in this plan and will provide us with products and expertise in the alternative investment sector, which is an increasingly important segment of the investment market. We believe their sophisticated fund of hedge funds platform will be an attractive option for our institutional clients," Goggin added in the statement.
GAAM is a fund of hedge fund manager with a focus on institutional and high net-worth clients. The fund has $2.8 billion in assets under management.