Bank of Ireland is understood to be in advanced talks to buy Covestone Asset Management, a seven-year-old firm with over €100 million of funds under management that was put up for sale earlier this year by founder Donal Roche.
A deal, which has yet to be finalised, would not include Covestone’s private equity and property investments business. It is believed the business received a number of unsolicited approaches in the past year and a half before it was put on the market.
While the size of the transaction is small, it is being seen as a signal of intent by Bank of Ireland to push further into wealth management as the State’s lenders seek to boost their non-interest income, particularly as their loan books have contracted sharply since the onset of the financial crisis.
Bailout
The group sold Bank of Ireland Asset Management in January 2011 to US financial powerhouse State Street under a restructuring plan agreed with the European Union as part of its bailout. However, it managed to secure a reprieve from the EU from having to dispose of its New Ireland life and pensions business.
The bank also cut jobs in its private banking division in 2013 as activity in the business declined during the crisis and even wealthy individuals who had managed to escape the worst of the property crash chose to remain on the sidelines.
Covestone Asset Management will most likely be absorbed into private banking business. Representatives for Bank of Ireland and Covestone declined to comment on the talks.
Trading
Mr Roche, son of one of CRH's founders of the same name, set up the business in 2009 when he took about €40 million of funds from Appian Wealth Management, a firm he co-founded in 2000, in what was described at the time as an amicable parting.
The funds under management at Covestone include Roche family money as well as other high net-worth individuals and charities.
Mr Roche, a former managing partner of corporate law firm Matheson, decided from the outset to have no entry or exit fees attached to investments. Covestone's flagship institutional class Empiricus Fund, which is invested in 30 stocks that fund manager Neil Osborne believes are trading at a deep discount to their "intrinsic value", has delivered a return of over 33 per cent since its inception in June 2013, according to the firm's website.
