Integrated Asset Management, an Aim-listed alternative investment group, has signed a conditional agreement to sell the majority of its fund of hedge funds business to Sal.
Integrated Asset Management, an Aim-listed alternative investment group, has signed a conditional agreement to sell the majority of its fund of hedge funds business to Sal. Oppenheim (France), a Paris-based wholly-owned subsidiary of Sal. Oppenheim jr & Cie.
The German private banking group will pay a combined consideration of approximately EUR3.5m in cash and the cancellation of Sal. Oppenheim’s entire share interest in Integrated of 11,496,111 shares (representing approximately 27.1 per cent of the current outstanding shares).
EUR2m will be payable in cash immediately upon completion of the disposal with a further payment of approximately EUR1.5m to be paid in the form of a cash dividend from Altigefi to the company. The scale of the dividend paid by Altigefi will be determined by the excess of cash reserves in Altigefi over regulatory capital at the time of completion.
Under the terms agreed, Integrated will sell its 51 per cent interest in Altigefi, its Paris-based fund of hedge fund manager, to Sal. Oppenheim (France), which already owns the remaining 49 per cent of the equity. As part of the transaction, Integrated will also transfer the management agreements relating to five of its other funds to Sal. Oppenheim (France).
Unaudited management accounts as at 31 December 2008 indicated that the combined assets under management of funds managed by Altigefi and the other five funds was USD800m.
The transaction does not impact Integrated’s brokerage operations in Milan which will continue to operate as usual.
The fund of hedge funds business as a whole reported audited revenues of GBP7.65m, audited profits after taxation of GBP0.51m, net assets of GBP24.28m and assets under management of USD2,896m in the year ended 31 December 2007. In the six months ended 30 June 2008 the fund of hedge funds business reported unaudited revenues of GBP6.44m, an unaudited loss after taxation of GBP0.93m, unaudited net assets of GBP24.42m and assets under management of USD2,402m.
The board will use the proceeds of the disposal for general corporate purposes and this may potentially include acquisitions. The transaction is subject to the usual closing conditions including the receipt of regulatory approvals. As Sal. Oppenheim is a related party for the purposes of the Aim Rules for Companies, an independent committee of the board has been formed to approve the terms of the transaction.
Emanuel Arbib, chief executive of Integrated (pictured), says: ‘In response to the unprecedentedly challenging market conditions of the past nine months, we have structured this deal with Sal. Oppenheim to benefit both our funds’ investors and the company’s shareholders. Once the transaction is completed, Integrated, with a strong and liquid balance sheet, will be well positioned to consider opportunities that are available in today’s marketplace.’
