BELGIAN FINANCIAL services group KBC has agreed to sell its Irish asset management arm for an “upfront” cash payment of €23.7 million to Brussels-based RHJ International (RHJI).
KBC is also set to receive up to half of an expected future reduction in the Dublin company’s regulatory capital, up to a maximum payment of €3.5 million.
The acquisition is part of a wider move by RHJI, which is listed on the Euronext stock market, to transform itself from an industrial holdings group into a wealth management adviser.
RHJI is in the final stages of acquiring UK asset manager Kleinwort Benson, a deal announced last October.
The Irish transaction is subject to regulatory approval and is expected to be completed in the fourth quarter of 2010.
These two deals will give RHJI assets under management of about €10 billion.
Leonhard Fischer, RHJI’s chief executive, said the Irish deal was a “further step in the transformation . . . into a dynamic financial services group”.
KBC Asset Management Dublin Ltd employs 58 staff and manages about €4 billion for global institutional clients. Its products are based around three core areas: environmental equities; dividend-oriented equities; and multi-asset strategies.
The company said there would be no job losses and its operations in Dublin and New York would continue as usual.
The Irish asset manager was put up for sale about six months ago and is believed to have attracted significant interest from overseas players.
Seán Hawkshaw, chief executive of KBC Asset Management Dublin, said: “RHJI were the preferred choice for management. That was very much based around a cultural compatibility in our dealings with them and we also like the Kleinwort Benson brand.
“We were also attracted by the fact that they wanted to continue to develop the company as an autonomous business.”
Mr Hawkshaw said the company is keen to grow in the US. “We expect to build on the resources that we have in the States. It’s an important market for us.”
RHJI plans to use the Kleinwort Benson name in Ireland. “The intention is that Kleinwort Benson will be the overarching brand for all financial services activities in the [RHJI] group,” Mr Hawkshaw said.
In a statement issued yesterday, Brussels-based KBC said the Dublin asset manager was “deemed to be no longer core” to the group’s retail and SME activities in Belgium and central and eastern Europe.
The deal will have no impact on KBC’s banking activities in Ireland and the asset manager will remain at its Dawson Street base in Dublin.
KBC acquired the Irish business – formerly known as Ulster Bank Investment Managers – in June 2000 for €105 million. At the time, the investment manager managed €7 billion in assets.
“There was a very different business . . . compared to what we have now,” Mr Hawkshaw said.
