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Merchant bank to focus on alternative asset management restructuring

Grisons Peak, the financial services investment bank, and IGS Group, an alternative assets advisory business, have announced the launch of Alternative Investment Merchant Banking.<

Grisons Peak, the financial services investment bank, and IGS Group, an alternative assets advisory business, have announced the launch of Alternative Investment Merchant Banking.

The bank is a 50-50 joint-venture between the two firms which will focus on M&A, restructuring, and debt and equity fund raising transactions exclusively for firms in the alternative assets industry.

It will initially focus on the UK and European markets.

The firm will advise on both national and cross-border transactions with the optimal deal involving single fund managers with assets under management of between USD250m to USD750m or fund of hedge funds managers with assets under management of between USD400m and USD1bn and ideally a minimum of five years track record for either.

Transactions undertaken will include mergers, acquisitions, divestitures, sales and purchase of minority and majority interests, and fund and management company restructuring.

AIMB will be flexible on fee structure which includes the option for revenue and equity carry arrangements.

It will combine the management and market experience and commercial networks of Grisons Peak, which already focuses on deal structuring, execution and capital raising for firms in the financial services sector, and IGS Group, a full-service provider of services to investors, fund managers, product structurers, distributors and intermediaries in all sectors of the alternative assets industry.

The business will be co-led by Paul Sullivan, partner of Grisons Peak, and John Godden, chief executive of IGS Group, supported by an international advisory board, and will be capitalised by equal capital contributions by both parent firms.

The firm expects to be fully operational by the end of January 2009 following the receipt of FSA regulatory approval.

Grisons Peak and AIMB are currently FSA authorised and regulated.

Godden says: ‘With a 30 per cent decline in assets under management, expected 50 per cent decrease in the number of fund managers and no incentive fees for 2008, we will see a continuing surge in merger and acquisitions activity as the hedge fund industry goes into an accelerated Darwinian phase.

‘The alternative assets industry has traditionally been formed of boutiques which make for particular and complex merger issues requiring specialist knowledge of both hedge funds and M&A expertise. AIMB is perfectly positioned to address the survival needs of fund managers in the rapidly moving environment in which they now find themselves operating.’
 
Sullivan adds: ‘The reduction in assets under management in 2008 and the expected continuation of this trend in 2009 will increase the pressure on the owners and managers of alternative investment firms. Many of these firms will seek partners in order to improve profitability and increase their attractiveness to investors.

‘IGS, with its fund research and knowledge of institutional demand, will assist us in identifying the most attractive and compatible counterparties as we advise on transactions. AIMB will bring a merchant banking approach to advisory roles, working with owners and managers to find the optimal solutions, and will align our interests with clients by taking equity participations in selected transactions.’

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