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IPE special report May 2018

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ABN AMRO boosts hedge funds business with IAM buy

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UK - ABN AMRO is buying the fund of hedge funds manager International Asset Management (IAM) in order to strengthen its own fund of hedge funds offerings.

“We feel there is a strong demand for fund of hedge funds products,” says Frank Goasguen, global head of institutional sales, ABN AMRO Asset Management. “Inflows into the industry are decreasing after the frenzy of the past couple of years, but fund of hedge funds are here to stay. Investors are simply becoming more rational.”

Goasguen says: “We think the best structure to run these operations is to have a dedicated team. IAM has a similar investment philosophy and approach to ourselves.”

ABN AMRO’s flagship product in this field is the US$510 Luxembourg- based Global Multi-Strategy Fund, a fund of hedge funds. IAM, which is based in London and New York, runs US$217m London-listed Alternative Investment Strategies, a closed-ended fund. But ABN AMRO says these two funds will not be merged following the acquisition.

The acquisition will provide cross-selling opportunities between the two entities. While about 40% of ABN AMRO’s business comes from running segregated portfolios, bespoke management makes up 85% of IAM’s business.

Goasguen says: “That’s very attractive to us, because it allows us to go to our clients and offer them bespoke services. We do go for the segregated market as well, but we feel with IAM we will go further. One of the attractions from IAM’s point of view is that they can access our client base, which is wider.”

IAM’s five partners will continue to be involved in the day-to-day running of the business.

No detailed integration plans have been made as yet, but ABN AMRO’s own hedge fund arm and IAM’s London operations will be run from the same building.

Goasguen says it is unlikely there will be wholesale job cuts. He says: “There may be a few people leaving as a result, but cost synergies were not an important element in the decision to acquire IAM.”

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