European socially responsible investing (SRI) pioneer Dexia Asset Management is to be sold to Hong Kong-based investment house GCS Capital if final negotiations go through as planned.
Dexia AM is a founding signatory to the UN-backed Principles for Responsible Investment and created its first SRI fund in 1996. It has around €18bn of SRI funds under management.
GCS, whose principals are former senior HSBC investment banking figures, said it is in exclusive negotiations with bailed-out banking group Dexia SA to acquire the fund management business with around €80bn under management.
“The sale process of Dexia AM has entered into its final phase,” Dexia said. GCS was selected from international candidates, all with excellent credentials and solid business projects, it added.
Dexia said: “Building upon our existing investment and distribution platforms, they [GCS] seek to partner with Dexia AM’s management and teams to develop new growth opportunities.
“It is their priority to support the robust commercial relations which we have developed with our institutional and private clients.”
Dexia AM Chief Executive Naim Abou-Jaoudé has previously sought to reassure clients that it is “business as usual” during the ownership transition.The next step will be the signing of a sale and purchase agreement after which regulatory approvals and deal closing can be expected in 2013, it added.
“Dexia Asset Management presents a rare opportunity to acquire a well-capitalised, standalone asset management business with the potential to transition into a global franchise,” said GCS Chief Executive Dr. Huan Guocang.
Huan is a former Head of Investment Banking, Asia-Pacific at HSBC and a former senior economist at J.P. Morgan & Co. Alongside him in the GCS leadership team is co-founder and managing partner Mike Powell, the former Global Head of Markets at HSBC. Other members of the senior management team are all ex-HSBC, which is also advising GCS on the purchase.
GCS describes itself as a “strategic investor supported by institutions with strong financial resources and strategic capabilities” although the institutions are not named.
The firm plans to maintain Dexia AM’s current regional centers in Brussels, Paris, Luxembourg and Sydney, Dexia added. The Financial Times said the deal could be worth up to €500m.