BoI sells BIAM to State Street for €57M

investegate.co.uk/Article.as … 900028454U

The price of €57M for €26Bn of Asset Under Management (AUM) appears low at only 0.2% of AUM.

vrl-financial-news.com/wealt … ls-to.aspx

This survey shows the average European Asset Management deal in 2010 was priced at 2.4%. At 2.4% the sale would net €676M. Has State Street gotten a bargain or is the 2.4% only for juicy 2/20% fees?

This year KBC Asset Management was sold for €23.7 or 0.6% of AUM of €4BM. This is three times the value of BIAM.

investegate.co.uk/Article.as … 700075322U

On Monday Bluebay was sold for £963M, 4% of AUM of c£25Bn to RBC.

I presume it is to include staff, which will be subject to a TUPE, which is where the rest of the costs for State Street are.

I wonder will they improve the performance of BIAM? It’s been abysmal, well, since all those chaps left to go to Eagle Star (I think?).

The BIAM AUM includes quite a lot of indexed stuff done with State Street so you don’t really pay much for this type of low margin business; this explains the seemingly low price. Moreover, BOI is pretty much a forced seller.

The former BIAM fund managers went to an Aussie outfit called Perpetual. By all accounts they did well for themselves by moving but they have failed to re-create the success that they enjoyed during BIAM’s heydey. On the plus side they have access one of the top 10 capital pools in the world (Aussie pension money).

I suspect a lot of jobs will probably move to London (trading, research and fund management) - there is no need to duplicate these in Dublin. Sales and client support will stay in Dublin I guess.

As for performance, BIAM went through a brutal period but as I understand it their performance has been steadily improving over the past 3 years or so. Anyone familiar with the fund management industry will know the three year track record is vitally important when attracting money and persuading pension fund consultants to rate you.

BIAM used to be a world-class fund management company. It’s decline is seen by the industry as a case-study in how not to run an investment business. Whilst no one here has much love for the banks these folk are not bankers and I think that it is sad to see another Irish business disappear off the radar screen. Before the bust Dublin was building a reasonable reputation as a center for fund management and I for one had vague hopes of returning home one day to work in this industry. At one stage there was as much money managed out of Dublin as there is out of Edinburgh (and I am not including all the dodgy IFSC stuff). It is now just another industry that we used to be quite good at and that used to provide employment and wealth.

Maybe Johnboy but I knew 4 or 5 of the (as you say non IFSC) fund managers working out of Dublin. And every single one of them was a long & wrong case study. They were hopeless the minute the worm turned. One or two had “quantitative” strategies that you could rattle together in an hour but, as Bob Dylan put it, “I never was impressed.”

I am sure you are right but for a while it seemed as if Ireland was carving a niche for itself. At it’s peak BIAM was genuinely world class. They managed money for the like of Calpers and they competed for equity mandates with the top global fund management firms. No small feat for a fund management company that was not based in one of the world’s financial centres.