BKIR.L Regulatory News (BKIR)

20 Dec 2005 07:01

Bank of Ireland(Governor&Co)20 December 2005 Bank of Ireland Group to acquire majority stake in Guggenheim Alternative Asset Management - a US Fund of Hedge Funds Manager Bank of Ireland Group announces that it has entered into an agreement to acquire71.5% of Guggenheim Alternative Asset Management, a US fund of hedge fundsmanager focusing on institutional and high net worth clients, for an estimatedcash consideration of US$184 million (€153 million). Guggenheim AlternativeAsset Management has circa US$2.8 billion assets under management and is part ofGuggenheim Partners, a leading private wealth and investment management firm.The exact cash consideration will be determined based on Guggenheim AlternativeAsset Management's business performance to 1 April 2006. Guggenheim AlternativeAsset Management's management retains 11% and Guggenheim Partners 17.5% andthese holdings are subject to put and call arrangements in the medium term on apre-agreed basis. In the event of the exercise of these options, theconsideration would be in the form of Bank of Ireland stock. The number of unitsto be delivered will be determined by the purchase cost and the prevailing Bankof Ireland stock price at that time. The transaction is expected to close at theend of January 2006, subject to regulatory approvals and other customaryconditions. A key component of Bank of Ireland's strategy is to grow its portfolio of niche,skill-based businesses internationally. The development of the Asset ManagementServices division is a core element of this. The strategy of Asset ManagementServices is to build a diversified portfolio of discrete investment boutiquesand to sell investment solutions through its established global sales and clientservice platform. Guggenheim Alternative Asset Management is a rapidly growingbusiness in an attractive market segment and represents a further step in theimplementation of this strategy. It brings a high quality team, solid investmentperformance and stringent risk controls and transparency features which willappeal to institutional investors. Brian Goggin, Chief Executive, Bank of Ireland Group, said: "Our AssetManagement Services division is an important part of our Group. Over the lastdecade, we have built a significant international distribution capability, whichdelivers investment solutions to institutional investors and their consultants.Our strategy is to harness this capability to provide an enhanced range ofinvestment solutions in the future. The acquisition of Guggenheim AlternativeAsset Management is a further step in this plan and will provide us withproducts and expertise in the alternative investment sector, which is anincreasingly important segment of the investment market. We believe theirsophisticated fund of hedge funds platform will be an attractive option for ourinstitutional clients." Dominic Curcio, Managing Partner, Guggenheim Partners said: "From ourperspective, at the heart of this deal is a partnership between Bank of Ireland,Guggenheim Partners and the team in Guggenheim Alternative Asset Management, andwe are confident that this will be the start of a long and fruitful relationshipwith Bank of Ireland. This deal enables Guggenheim Alternative Asset Managementto harness Bank of Ireland's international distribution capability which willaccelerate its growth in the institutional market. All three parties have asignificant interest in the future of the business and we will work together toensure that Guggenheim Alternative Asset Management becomes one of the leadingproviders of customised hedge fund solutions for institutional and high networth investors globally." Editors' Notes •Guggenheim Alternative Asset Management is an established and successful New York based, fund of hedge funds manager. The firm was set up in 2002 and employs 35 people. Clients of the firm include Fortune 500 corporates and institutional pension funds, as well as high net-worth individuals. Guggenheim's advisory entity is registered with the Securities and Exchange Commission (SEC). •Guggenheim Partners is a diversified financial services firm, providing investment management and advisory services to individuals, foundations, endowments and institutions in the Americas, Europe and Asia. The firm has over $100 billion of assets under supervision. The firm traces its heritage to the Guggenheim family, a significant contributor to the development of business and philanthropy in the United States since the late 1800s. • Bank of Ireland Group is the leading provider of financial services in the Republic of Ireland and has a major presence in the UK market. Under Irish GAAP it had assets of c.€126 billion and generated pre-tax profits of c.€1.3 billion in the year ended 31 March 2005. The Asset Management Services division currently consists of two investment boutiques - Bank of Ireland Asset Management (assets under management of c.€44bn at end September 2005) and Iridian Asset Management (assets under management of c.US$10bn at end September 2005) together with the custody and fund administration business, Bank of Ireland Securities Services. •Alternative investments, of which hedge funds are a key component, represent a rapidly growing segment of the global investment market. Today, the hedge fund business worldwide is worth in excess of US$1 trillion. Double-digit growth is forecast for the next 3 years, with close to 50% of that growth expected to come from institutional investors. A fund of hedge funds approach gives access to this growing segment in a risk controlled manner. Ends. Date: 20th December 2005 For further information contact: Dan Loughrey Head of Group Corporate Communications 353 1 604 3833 Geraldine Deighan Head of Investor Relations 353 1 604 3501 This information is provided by RNS The company news service from the London Stock Exchange