Cohen backs hedge fund buyout

International Asset Management, one of the oldest fund of hedge funds, has regained its independence in a management-led buyout partly funded by private equity veteran Sir Ronald Cohen.

Sir Ronald Cohen, the founding partner and former chairman of Apax Partners, has teamed with boutique investment bank Jefferies to take a minority stake in International Asset Management (IAM), a fund of hedge funds manager based in London.

The deal marks the return to independence for IAM, one of the oldest fund of hedge funds managers, which was privately owned until February 2006 when it was acquired 100 percent by ABN AMRO Asset Management.

The buyout concludes a strategic review that began following the merger in April 2008 of Fortis Investments and ABN AMRO Asset Management. The latter was acquired by Fortis in the consortium bid launched with RBS and Santander for the whole of ABN AMRO in 2007.

Morten Spenner, chief executive of IAM, said: “Our new ownership structure generates a strong alignment of interests within the firm plus great depth of experience from our two new external shareholders.”

He said the firm was majority owned by its employees with a total of 15 shareholders in the buyout, a number he expected to grow over time.

Albert Fuss, executive director of IAM, told PEO: “I’ve known Sir Ronald for more than 30 years, watched what he did at Apax and all of these years he respected what IAM was doing. He clearly felt if we became independent he’d like to get involved. He’s a builder of businesses. He can bring an outside view.”

Spenner added: “He will be an active investor, someone with whom we can share thoughts about strategy or investment ideas. Jefferies will bring a lot of complementary benefits.”

The pair expects Jefferies to be particularly influential in increasing IAM’s global reach and audience and developing a broader sales and distribution network. The firm already has an office in New York and as of 31 March 2008 had $4.3 billion in assets under management. Its flagship fund Alternative Investment Strategies was the first closed-ended fund of hedge funds to launch on the London Stock Exchange in 1996.

The transaction will not have a material impact on the Fortis net profit per share. Some solvency relief will accrue to Fortis. Financing for the acquisition was provided by ING Capital. Jefferies’ M&A arm Jefferies Putnam Lovell acted as IAM’s financial advisor in the transaction. Cleary Gottlieb Steen & Hamilton provided IAM’s legal advice.