The Times reports that NM Rothschild has off-loaded its fund management unit to HBOS for £61m, far less than the £150m the firm wanted for the business when it was placed on the market three months ago.
The deal means that HBOS will secure £10bn of the unit's assets, the remaining £1bn which relates to Rothschild's Asian business will not be included in the sale. The bottom has fallen out of the asset management business in recent months and the low price the unit acheived reflects this.
Baron Eric de Rothschild, chairman of Rothschild Asset Management, said: 'We are pleased to have reached an agreement with Insight Investment Management (the HBOS fund management arm). This is a good deal for all parties concerned and we feel our client base will be well served'.
Around 100 staff, mainly from the back office, are thought likely to be made redundant as a result of the deal. Fund managers have been given 'golden handcuffs' to encourage them to stay with the new owners until at least June next year.