Bank of Ireland will likely sell its Bank of Ireland Asset Management subsidiary and its stake in a joint venture with U.S. private equity fund-of-funds manager Paul Capital Investments as part of a broader restructuring announced by the bank Friday.
BIAM had €25 billion ($33.8 billion) in assets under management as of Dec. 31, compared to about €45 billion three years earlier.
The sale would be contingent on whether the European Commission approves the restructuring plan.
In a proposal presented to the EC, bank officials are planning to sell the remainder of its asset management business, including a 50% stake in Paul Capital, which has about $6.6 billion in assets under management. The EC is expected to decide whether to accept the proposal later this year.
The plan must include “burden-sharing by the bank’s stockholders and bondholders” and limit “any competition distortions resulting from any state aid,” according to the announcement.
Once considered a jewel in the crown of the Bank of Ireland, BIAM had been struggling with staff turnover, performance issues and asset outflows before the financial crisis hit.
Following the collapse of Lehman Brothers, the problems of BIAM’s parent company led to further deterioration of the money manager. In 2009, majority stakes in U.S. businesses Iridian Asset Management and Guggenheim Alternative Asset Management were both sold in management buyouts at a loss to the bank in order to raise capital.
Officials at the Bank of Ireland were also forced to turn to the government of Ireland for state aid, and as a result, must now gain European Commission approval to satisfy regulatory conditions linked to the bailout.
