When Bank of Ireland took over New Ireland for an exceedingly pricey £274 million last year, there was plenty of speculation about whether the newly-expanded Bank of Ireland could hold on to parts of the New Ireland business. The millions of pounds worth of segregated pension funds managed by New Ireland aroused particular speculation.

Segregated pension funds are those usually involving a single employment's pension fund and New Ireland had about £700 million worth of this business.

After the takeover, New Ireland wrote to its various segregated fund customers telling them that as a result of the takeover, it could no longer operate such segregated pension funds. Bank of Ireland Asset Management into which New Ireland's fund management was subsumed no doubt hoped to hold on to the former New Ireland business. However, some of the pension fund trustees saw things differently and held "beauty parades" among fund managers.

Now, not only has SIPTU's £60 million staff pension moved to Ulster Bank Investment Managers (£50 million) and Friends Provident (£10 million); but the £200 million portion of the Telecom Eireann pension fund previously managed by New Ireland has moved to Irish Life and UBIM in equal portions. Another £100 million injected into the Telecom fund by the Government to cover past service has also been divided between Irish Life and UBIM.

The part of the Telecom business picked up by Irish Life will be a boost to the new head of investment, Sileanne Wootton. This will be managed on a similar basis as Irish Life's new consensus managed fund, although it will be totally separated from the managed consensus fund.

Bank of Ireland sources indicated that it fully expected chunks of the former New Ireland business to move, and pointed out that BIAM already managed a portion of the Telecom fund. "It would have been very presumptuous of us to automatically assume we would get the business, especially where we already manage part of a fund," said the source. That may be the case, but those in the market are sceptical about any assumption by Bank of Ireland that one-third of the New Ireland business would move to other fund managers. When you have paid as much as Bank of Ireland has for New Ireland, any business foregone must be a cause for concern.