London-based asset manager GAM (UK), a wholly-owned subsidiary of Swiss bank Julius Baer, is to acquire Augustus Asset Managers. The London-based fixed income and foreign exchange investment management company was set up in January 2007 as a management buy-out from Julius Baer.

The transaction, on undisclosed terms, is expected to close at the end of April 2009, subject to the necessary regulatory approvals.

The buy-out was supposed to enable the business to develop as an independent asset manager, while continuing to service Julius Baer branded funds, their largest clients.

But in current tough market conditions, all parties consider that the franchise and clients will be better served as part of a larger organisation backed up by the global strengths of GAM and the Julius Baer Group.

Augustus had assets of $7.6 billion at the end of 2008, the majority of which relates to the Julius Baer Absolute Return Bond and Local Emerging Markets Bond funds, but also includes the JB Global Rates Hedge Fund, among other hedge funds.