Arpad Busson, who rode a global boom in hedge funds to become one of the biggest investors in the industry before the 2008 financial crisis, is in talks to sell his EIM fund-of-funds company after clients withdrew their money, four people with knowledge of the matter said.
Executives at EIM are considering a sale to another money manager because the amount the firm oversees has dwindled by more than 50% from a peak of more than $14 billion before the crisis, said the people, who declined to be identified because the talks are private. With fees for managing client money falling, EIM is finding it harder to profit from a business that still employs more than 100 people and has offices in cities including London, New York and Paris, the people said.
Mr. Busson would want to remain with EIM if it is sold to another company, according to a person briefed on his thinking who spoke on condition of anonymity.
“EIM is constantly looking at opportunities to grow its asset base and its operations,” said Neil Bennett, a spokesman for the firm in London. He declined to comment on sale talks.
EIM’s talks highlight the decline of hedge funds of funds, which placed billions of dollars on behalf of their clients with top money managers such as John Paulson, Alan Howard and Louis Bacon. Pension funds, sovereign wealth funds and insurers are increasingly bypassing funds of funds after the companies lost money for investors in 2008 and placed assets with Bernard Madoff, later convicted of fraud. EIM also invested with Mr. Madoff, who is serving a 150-year prison term after being convicted of running a Ponzi scheme.
Mr. Busson started EIM in 1992 after establishing himself in the hedge fund industry by helping raise money from European clients for firms including Mr. Bacon’s Moore Capital Management and Paul Tudor Jones’ Tudor Investment Corp.
