Dutch-based ABN Amro Asset Management has bought International Asset Management, the London-based investment business that launched one of t...

Dutch-based ABN Amro Asset Management has bought International Asset Management, the London-based investment business that launched one of the UK's first quoted funds of hedge funds in 1996. IAM, which is currently management owned, was founded in 1989 by Albert Fuss, a former executive of Drexel Burnham Lambert, who holds 51 per cent. Its flagship fund, Alternative Investment Strategies, has had a 10.11 per cent annualised return since its launch in 1996. Other former Drexel employess, including Anthony Forward, managing director, and Alan Djanogly, investment director, also own about 45 per cent of the group. IAM first launched its business with $80 million of client money and now manages $2.6 billion, 20 per cent of which comes from high net worth individuals. ABN AMRO Asset Management’s existing fund of hedge funds operations, which have $1.4 billion of assets under management, will be combined with IAM. The combined business will have over $4.0 billion of assets under management. Although the price was not disclosed by either party, analysts estimate that the business should be worth as much as $300 million to $400 million, based on the values of quoted fund of hedge fund businesses. RAB Capital, which has also has around $2.6 billion under management, was capitalised at around £256 million last week. Man Group, which has $45.8 billion of funds under management has a market capitalisation of £6.2 billion. Mr Fuss and his colleagues now have a two-year deal to manage IAM's business for ABN Amro from their Piccadilly offices. They will also take on ABN Amro's existing funds of hedge funds business and around a dozen of its staff. The deal supports ABN’s focus on mid-market clients and gives the bank the opportunity to offer hedge fund products to mass affluent clients as well as mid-sized and large institutions. “We decided to approach IAM after a rigorous search across the industry. They have exactly the combination of history, people and performance to bring critical mass to our fund of hedge funds business,” said Kevin Smith, chief investment officer for equities at ABN Amro Asset Management.