|
|
|
|
|
  Email+  Share+
BoI makes loss of €343 million on asset firms’ sale
08 November 2009 By David Clerkin Markets Correspondent
Bank of Ireland received just €7 million from the recent sale of two US asset management businesses it had spent more than €350 million to acquire.
The bank, which last week reported underlying losses of almost €1 billion for the six months to September, disclosed it had sold Iridian Asset Management and Guggenheim Advisors in recent months. It took a €300 million charge in its accounts last year after writing down most of the value of its investment in each business.
Iridian, in which then chief executive Michael Soden acquired a controlling interest in 2002, cost the bank more than €200 million in stage payments.
Brian Goggin, Soden’s successor, went on to take control of Guggenheim in 2005, when he spent €153 million on a 71 per cent stake which was later increased. The bank acquired the businesses to increase its asset management footprint in the US, following a strong performance by Bank of Ireland Asset Management (BIAM) in the early part of the decade.
A poor investment performance triggered a sharp reversal in BIAM’s fortunes, however, as clients withdrew their money. At one point, BIAM held €23 billion in client funds under management, but the vast majority of this has since gone to rival firms.
The acquisitions of Iridian and Guggenheim had aimed to diversify the bank’s asset management business by extending its services to include specialist hedge funds and increasing the scale of the business.
|
|
|
