The Daily Telegraph reports that HBOS, the UK's fifth biggest bank, is to purchase NM Rothschild's fund management business, Rothschild Asset Management (RAM), for around £100m.
The two parties are believed to have entered into exclusive talks and a deal is expected to be announced in the next fortnight. RAM, with around £12.5bn under management at the end of March, was put up for sale three months ago as it struggled in the recent difficult equity markets. The business is thought to have lost £15m last year on turnover of £44m.
Rothschild had hoped to acheive £150m from the sale, but the market for fund management businesses is not good at the moment. It will do well to off-load the unit for £100m.
HBOS has recently rebranded its fund management arm, now called Insight. The Rothschild move looks logical and fits in well with HBOS's aggressive strategy to own one of Britain's top asset management businesses. Insight currently has around £63bn under management.