Bank of Ireland is to acquire a 71.5 per cent stake in New York-based hedge funds firm Guggenheim Alternative Asset Management for an estimated €153 million.
The US fund-of-hedge-funds manager's business focuses on high net worth clients and has around $2.8 billion in assets under management. It is part of Guggenheim Partners, a private wealth and investment management company and employs 35 people.
BOI said the exact cash consideration for the deal will be determined based on Guggenheim Alternative Asset Management's business performance to 1 April 2006.
The company and its parent will retain 11 per cent 17.5 per cent respectively and these holdings are subject to put and call arrangements in the medium term.
"In the event of the exercise of these options, the consideration would be in the form of Bank of Ireland stock," BOI said in a statement.
"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 Management Services division is a core element of this. The strategy of Asset Management Services is to build a diversified portfolio of discrete investment boutiques and to sell investment solutions through its established global sales and client service platform.
"Guggenheim Alternative Asset Management is a rapidly growing business in an attractive market segment and represents a further step in the implementation of this strategy. It brings a high quality team, solid investment performance and stringent risk controls and transparency features which will appeal to institutional investors."
Brian Goggin, chief executive of Bank of Ireland Group, said: "Our Asset Management Services division is an important part of our group.
"Over the last decade, we have built a significant international distribution capability, which delivers investment solutions to institutional investors and their consultants.
"Our strategy is to harness this capability to provide an enhanced range of investment solutions in the future. The acquisition of Guggenheim Alternative Asset Management is a further step in this plan and will provide us with products and expertise in the alternative investment sector, which is an increasingly important segment of the investment market. We believe their sophisticated fund of hedge funds platform will be an attractive option for our institutional clients."