Bank of Ireland Asset Management (BIAM) is entering the US market by purchasing a 61% share in the US investment manager Iridian Asset Management for an initial fee of $177m (E192m).
The Irish investment manager will pay an additional sum of up to $21m based on performance over the next two years. It also has the option of acquiring the remaining 39% over the next six years.
Founded in 1996, Iridian is a $11bn value manager specialising in mid-cap and large-cap US equities. Its 200 US institutional clients typically hail from the foundation, endowment and corporate sectors.
BIAM has been intending to increase its fee-based and overseas activities for some time and has said it was eager to grow by appropriate acquisitions.
BIAM chief executive Willie Cotter says: “this acquisition gives us a presence in the biggest product segment of the US investment market and in a way that would have been difficult to achieve organically.”
As for strategy, he adds: “While Iridian has concentrated primarily on the foundation, endowment and corporate sectors to date, our focus will be on using our marketing and distribution capability to help them develop a presence in other attractive segments of the institutional US market and other markets internationally.”
IBI Corporate Finance and Berkshire Capital advised Bank of Ireland; Iridian used Morgan Stanley and Lazard Freres.