EFG International has acquired the fund of hedge funds manager Capital Management Advisors. CMA, based in Bermuda, has around SFr2.1 billion...

EFG International has acquired the fund of hedge funds manager Capital Management Advisors. CMA, based in Bermuda, has around SFr2.1 billion ($1.6 billion) of assets under management.

EFG said in a statement, that CMA currently has 29 employees and key employees have entered into longer term agreements effective from the date of the acquisition. CMA’s founders – Sabby Mionis and Angelos Metaxa – are expected to stay on at EFG.

“The acquisition of CMA enhances EFG International's capabilities in this area further (hedge funds), offering management services in the fund of hedge funds area and hedge fund research capability. This is a highly strategic and synergistic acquisition,” said Lawrence Howell, chief executive of EFG International.

The Zurich-based bank added that it would pay 50 per cent of the cost of acquisition initially and the remaining amount would be paid out over a five year earn-out period.

“The estimated total consideration values CMA at an estimated price-earnings-ratio below 10 based on estimated 2005 net profits of CMA. The targeted contribution to EFG International's 2006 net profits from CMA is SFr20 million,” said EFG in its statement.

EFG International currently has SFr5 billion of clients' assets invested in hedge funds and hedge fund related products.