A leading UK institution has taken a stake in an Irish-based hedge fund in a deal that valued the business at close to €50 million.
Newly-established Cardinal Asset Management, confirmed yesterday that London-based institutional asset manager, Isis, has taken a stake in the Irish fund.
Cardinal's founders are Mr Nigel McDermott, a former director of the Mr Dermot Desmond-controlled International Investment and Underwriting (IIU), and two former Zurich Capital Markets (ZCM) executives, Mr Nick Corcoran and Mr Paul Kearney.
Its statement did not give details of the size of the holding or its value. However, it is understood that Isis paid €7.5 million for a 15 per cent stake in the fund.
It also placed a similar holding in Cardinal with a number of high net worth individuals for what is believed to be the same price. The deals value the recently-established Cardinal at a total of €49.5 million.
Subject to final regulatory approval, Cardinal Asset Management will create and manage alternative investment products based on hedge funds and private equity. In its statement, Mr Corcoran made it clear that it intended targeting financial institutions.
Mr McDermott worked on the bond desk at NCB Stockbrokers, and moved with Mr Desmond after he sold that business to Ulster Bank, to become a founder and director of IIU.
Mr Corcoran was executive vice-president of ZCM in Zurich, Switzerland. His responsibilities included developing its Asian and European businesses.
During his time there, ZCM became a leading alternative asset manager, with over $10 billion (€8 billion) in these assets, under its control.
Mr Kearney served as managing director and senior executive officer of Zurich Capital Markets (UK), and was involved in establishing it as a leading player in alternative investment.
Isis chairman, Sir David Kinloch, yesterday singled out the Cardinal deal in his end-of-year statement.
He told shareholders that the alternative investment market had been growing rapidly, and said Isis was seeking a way of securing a presence in it in a "secure and disciplined manner".
Isis had £63.5 billion sterling (€95.3 billion) under management at the end of 2003.
Yesterday, it reported that profit before tax and write-offs grew 15 per cent to £25 million from £21.6 million. Earnings per share grew to 12 pence from 10.4 pence.
