Swiss asset manager GAM is to acquire Arkos Capital, an independent asset management firm regulated in Switzerland with assets under management amounting to SFr664 million ($740 million).

The transaction, on undisclosed terms, is expected to close before the end of the second quarter 2012, subject to regulatory approvals. All Arkos' key personnel, including its investment professionals, will be retained and will continue to operate out of Lugano in Switzerland.

Under the terms of the agreement, GAM will initially take 74.95 per cent of Arkos. The balance, currently held by the management of Arkos, will be acquired through deferred cash payments linked to the future development of the business.

Arkos manages a range of absolute return funds, both offshore and onshore. Its offering includes long/short equity strategies covering Europe and emerging markets, as well as a specialist offering focusing on financial securities and an active convertible bond strategy.

Following completion of the transaction, all Arkos products will be distributed under the GAM brand, but all investment strategies will continue to be managed by Arkos.