BOSTON-BASED FUND administration company State Street is understood to be among a number of serious contenders in discussions to purchase the asset management business of Bank of Ireland but any potential sale could take several months.
Bank of Ireland Asset Management (BIAM) is one of three businesses on the market as a condition of European Commission approval for the bank’s €3.5 billion recapitalisation by the Government.
A spokesman for the bank declined to comment on the parties interested in buying BIAM. The bank said at its half-year results earlier this month that it had received unsolicited expressions of interest in BIAM.
“Several parties are pursuing that interest and we will review that if and when something arises out of that,” said Bank of Ireland chief executive Richie Boucher.
No agreement has been reached on a sale and talks are ongoing, according to a well-placed source.
The Irish Times reported last April that BIAM had received an approach from a large global financial institution interested in buying the business in advance of the bank announcing that it had agreed to sell the business.
Chris Johns, the unit’s chief executive, said at the time “a very credible third-party global financial institution have a very strong expression of interest on the table”. BIAM had assets of €25 billion under management at that time and 136 staff in employment.
The unit has in recent years lost its position as the State’s largest investment manager to Irish Life Investment Managers, Irish Life Permanent’s fund manager.
BIAM had assets of €57.5 billion under management in 2004.
The sale price was then mooted to be less than €100 million.
Australian group Macquarie had been in negotiations to take over the Dublin-based asset manager but has since dropped out of the process.
State Street has a large presence in Ireland, employing more than 2,000 staff in Drogheda, Dublin, Kilkenny and Naas. The company services more than $500 billion in assets and accounts for about 20 per cent of employees in the Irish funds industry.
The US company signalled earlier this month that it was seeking to expand its interest in actively managed investments through acquisitions and reduce the group’s reliance on passive funds.
The firm made two European acquisitions over the past year in the area of asset-custody, purchasing Mourant International Finance Administration in the Channel Islands in April and the asset servicing unit of Italy’s Intesa Sanpaolo the following month.
Bank of Ireland also has to sell ICS Building Society and life and pensions company New Ireland, as a condition of recapitalisation. The bank’s share price fell 2.2 per cent or 1.7 cent to 74.8 cent. – (Additional reporting: Bloomberg)
