INTERVIEW:Biam, once perceived as an unloved asset of Bank of Ireland, is gearing up for sale, writes CIARÁN HANCOCK

THE SPLENDID sunshine pouring through the window of Chris Johns’s office, which overlooks the Grand Canal close to Baggot Street bridge in Dublin, seems apt for the blossoming belief within Bank of Ireland Asset Management (Biam).

After some “awful” years of underperformance, high-profile staff defections and retrenchment from international markets, Johns, Biam’s interim chief executive, insists the asset manager has turned a corner and can have a bright future under a new owner.

Last week, Bank of Ireland announced that it would sell Biam as part of a restructuring plan agreed with the European Commission. This is part of the price the bank is paying for participating in Nama and receiving €3.5 billion.

On Friday, Johns was able to tell staff, clients and investment consultants – an important constituency for an asset manager – that a serious offer is already on the table.

Johns won’t reveal the identity of the suitor but says it’s a large global financial institution whose name is known in Ireland. This offer is a legacy of an earlier sale process that the bank initiated in 2007. While that “strategic review” ended in August 2008 without a deal being inked, Johns says Biam continues to generate calls from interested parties.

"Once a month, somebody would knock on the door," he told The Irish Timesthis week.

Johns says the media view that there was no serious interest in buying Biam after it was put on the blocks in 2007 is false. “It is often reported in the press that Bank of Ireland struggled to sell Biam in that period because there was no interest or precious little interest. That, actually, is factually incorrect. We did come very close to a deal and the bank walked away from that deal and it wasn’t the only expression of interest on the table.”

Johns bristles at the picture that’s painted in the media of Biam being an unloved, underperforming asset manager.

It was true in the early part of the last decade but the Cardiff-born executive insists that the picture has changed utterly in the past three years.

At its peak, Biam managed €57 billion worth of client assets and had a successful operation in the US. It was seen as the jewel in the Bank of Ireland crown and valued at up to €1 billion.

Today, it manages client assets of €25 billion. Biam holds just five mandates in the US, where it offices have long since shut. Value-based equity investment remains its bread and butter.

“The years 2003, ’04, ’05, ’06 and part of ’07 were very difficult years for Biam from a whole host of perspectives,” he says.

High-profile defections from its Dublin equity business to Australian investment group PI knocked client confidence. Three changes in chief executive – one of them was Brian Goggin, who became the bank’s group chief executive – took place in as many years and its investment performance tanked.

“People believe, often rightly, that when you have that kind of people instability, investment-related performance will inevitably follow and it did. We lost mandates simply on the back of that, before the performance numbers began to deteriorate like they did.”

Mick Sweeney, who had established a successful track record with the bank’s global markets division, was recruited as Biam’s chief executive in 2006 and he hired Johns from Collins Stewart as chief investment officer, with a mandate to reshape the business and rebuild its investment team. It was a return to Dublin for Johns who had worked here on and off since 1988.

“It took us a year to get our arms around the problem. There were a lot of issues to do with people and process and these are things that are not sorted out overnight,” Johns explains.

After a slow start, Johns says Biam’s performance numbers are beginning to reflect the investment of time and money that was made by Bank of Ireland.

For example, its global spotlight fund outperformed its benchmark by 10.24 per cent in 2009. Over three years, it has outperformed by 3.53 per cent. Its property fund has outperformed its benchmark by 6.5 per cent over three years. Six of its funds outdid their benchmarks in 2008 and 2009.

“From the autumn of 2007 onwards things have been put back on track from an investment performance point of view,” Johns says. “It’s the five to seven year numbers that are dodgy.”

So what changed? “There’s no button or lever I can press to affect investment performance. We tightened up the way we do everything; tightened up the way we do portfolios; implemented newer risk management process around the funds. We had a good look at everything.

“What took longer than we had planned was the people side of the business. People that we didn’t want to leave left.”

Johns eventually pieced together a new investment team and its composition has remained “stable but not static” for the past few years. He accepts some of his 136 staff are nervous about the future but he is confident that Biam’s can be bright.

“I believe that what I’m working towards, people will find very congenial and very attractive.”

Biam’s unidentified suitor is “not put off by the Ireland thing”, he says, a reference to our tarnished image globally.

“They’re very happy with Dublin as a financial centre, there’s no issues there at all. It’s a validation of what we’ve done.”

And what of Johns’s own role with the company? He has filled in as chief executive ever since Sweeney was moved upstairs to a group role as the financial crisis unfolded. He currently combines this with the post of chief investment officer. “It’s not a long-term solution, the role has to be split again when we do a deal,” he says. “I won’t reveal what my preferred is.”