HEDGE fund guru Arpad “Arki” Busson yesterday agreed to merge his funds business EIM Group into larger Swiss money manager Gottex Fund Management, creating a bigger business with $10bn of fee earning assets.
Busson, one of the industry’s best known figures, will take a 29 per cent share stake in the enlarged group through his family trust and assume the role of non-executive chairman when the deal completes next year.
“$10bn of fees under management really puts us in the big boys’ club,” Busson told City A.M.. “I’m really excited. We’ve been playing defence for a while but now we are definitely playing offence.”
Swiss-listed Gottex, led by chief executive Joachim Gottschalk, has issued 14m new shares to pay for the company, valuing Busson’s company at 30m Swiss francs (£20.7m).
Gottschalk said the merger would help the company save $10m to $12m compared to the current cost base as it moves to integrate compliance, legal and investment teams.
Shares in the firm rallied 15 per cent yesterday as investors gave the thumbs up to the deal. They closed up seven per cent at 2.41 Swiss francs.
The deal cements a 20 year professional and personal friendship between the two men, who first mootted the idea of the deal three years ago.
EIM was founded by Busson in 1992 and rode on a wave of success by placing its clients’ money with some hedge fund managers like Alan Howard and John Paulson. But funds shrank during and after the financial crisis amid a seachange in investor attitudes.
“Nothing really did change apart from the introduction of consultants – it’s just a rotation of capital,” Busson said yesterday.
PROFILE: ARKI BUSSON
Arpad “Arki” Busson is a charismatic figure in the world of high finance and is best known outside his professional interests for dating Hollywood actress Uma Thurman, star of the Quentin Tarantino’s Kill Bill movie.
The 50-year-old Frenchman – who also dated Elle Macpherson – is seen by many as a talented fundraiser, well-connected with a good eye for talented investment managers. He started out working on Wall Street in the 1980s, working with hedge fund wizard Paul Tudor Jones at Tudor Investment before going on to raise more money for Louis Bacon at Moore Capital. He set up EIM Group in 1992 to help expand the services he offered to investors, growing assets to $14bn. Outside of the hedge fund industry, his name is associated with the Absolute Returns for Kids (Ark) Gala, a lavish society event he creates every year to raise money for charity. Notable guests attending the star studded event over its ten-year history include Madonna, the Duke and Duchess of Cambridge and US President Bill Clinton. The event, which raised a record £26.6m in 2007, was cancelled for the first time this year in a bid to reflect more austere economic times. Asked if he planned to revive the event, Busson told City A.M. yesterday: “All options are open. It’s a collective decision for the board so who knows. I think we’ve got to make sure we have close proximity with our donors and whatever model we come up with will be the right model.”