The decision by AIB to sell its interest in investment managers Montgomery Govett has been on the cards ever since the bank bought its parent, John Govett. And the sale has worked very much in Montgomery Govett's favour, according to managing director and founder, Mr Paul Montgomery.

This week, the firm has begun formally working with its new German partners, the Oppenheim & Cie investment banking group. It is the kind of link-up to which the Irish company would naturally have aspired, says Mr Montgomery.

AIB's acquisition of John Govett was "a fortuitous act" for the company he founded in 1986, he says. It was obvious that Montgomery Govett would have to be sold.

"It was quite clear that relationship wasn't going to work for them or for us. It would have completely compromised our independence," Mr Montgomery says. Luckily though, AIB recognised these potential difficulties almost immediately after the acquisition and acknowledged that Montgomery Govett should look for another partner, he says.

Over the past 12 months, Mr Montgomery has led negotiations with up to 10 potential partners, and came quite close to doing deals with several of them, before stumbling upon Oppenheim.

"We had mainly been looking in the UK and had entered quite advanced negotiations with one group."

A chance introduction to the company through its Dublin based international division opened the way for discussions, during which it became clear that a deal was possible, according to Mr Montgomery.

"From the first meeting we had with Oppenheim, we realised we had the same culture and broadly shared the same objectives. They had already established partnerships in the Far East and in the US with expert local investment companies and we could immediately see exactly where we would fit into their operations."

The privately-owned Oppenheim bank has been actively forging links with established investment management groups outside Europe in a bid to spread its expertise and presence in the global investment community.

Established in 1789, it has remained as a family-owned firm which is managed as a partnership. Its chairman, Dr Karl Otto Pohl, is a former president of the Bundesbank and one of the architects of the single European currency. Last year, Oppenheim reported profits of 56 million deutschmarks (£20.7 million) from its corporate finance, private clients and asset management operations. It employs 692 people worldwide and last year had 35 billion deutschmarks of funds under its management.

It has acquired 60 per cent of Montgomery Govett, buying AIB's 40 per cent interest, plus an additional 20 per cent believed to be that held by former director, Mr Dan Donovan. Its investment in Montgomery Govett has not been disclosed, but industry analysts estimate that Oppenheim could have paid between £2 million and £4 million for a majority stake in the business.

The remaining 40 per cent is held by Mr Montgomery, and two other directors, Mr Brian Grey and Ms Claire Kenny.

"The change of control is a technical situation. John Govett had a controlling interest, but didn't chose to express that in an equity sense. Anyway we would probably have been looking to get into a new environment by now," says Mr Montgomery.

Montgomery Oppenheim, as it is now known, is a relatively small-sized operation employing 12 people at its Dublin offices. It is estimated to manage around 2 per cent of the Irish group pension schemes with blue-chip companies such as Nestle and Pfizer among its clients.

The average group pension scheme is around £35 million, according to Mr Montgomery. It also manages a range of smaller schemes through its other investment funds. The group also managed funds for the EBS building society.

Mr Montgomery believes that Oppenheim will be looking to aggressively grow the Dublin-based operations, and will also actively consider opportunities within the British market.

"In Ireland, it already has an IFSC operation which provides expertise on the bond side for the group and it will be anxious to substantially build up the Irish operations," Mr Montgomery says.

Meanwhile, the partnership also gives Montgomery access to international markets, particularly the US and Far East.

"This will be particularly beneficial in helping us to address the major challenges that lie ahead with the completion of the single European market and the single currency."