Bank of Ireland has invested $25 million (€19.9 million) for a 50 per cent share in a joint venture with US private equity specialists Paul Capital Partners.

The new joint venture, which will provide fund of funds products and advisory services to institutional and other investors globally, will be called Paul Capital Top Tier Investments and will be based in San Francisco.

Bank of Ireland has an option to increase its shareholding to 70 per cent, no earlier than 2008, on a pre-agreed basis. The bank also paid $5 million in respect of interests in existing funds of funds.

Paul Capital will contribute its existing private equity fund of funds business, with assets under management of $1.1 billion, in return for a 35 per cent interest in the joint venture. Key management will own the remaining equity.

"One of the exciting aspects of the new partnership is that it will provide us with greater resources and enhanced distribution to expand our private equity fund of funds offerings in sectors like middle-market buyout, emerging markets and co-investment vehicles," said David York, who will head the new venture with Paul Capital's founder, Philip Paul.

Bank of Ireland said the deal was part of a plan to broaden the services offered by its asset management division, which has performed poorly for the bank in recent times.