Jupiter to be bought out by US private equity firm

The American private equity group TA Associates is to back Edward Bonham-Carter in a near-£800m management buyout of Jupiter Asset Management, the UK fund manager owned by Commerzbank.

A deal is expected to be struck with the German investment bank by the end of the week, bringing to an end an almost year-long auction for the company. Commerzbank announced its intention to either sell or float the company last summer. As recently as last month, the bank's finance director said the company was still considering all options for Jupiter, including an IPO.

However, joint chief executive Mr Bonham-Carter and his management team have been in talks with a series of private equity groups over the past few weeks, including the likes of Blackstone and Candover, with a view to mounting an MBO bid. It is believed the management was reluctant to take the company through a public listing.

TA, a Boston-based private equity outfit, has a history of investing in asset management companies. Previous investments include AIM, the US fund manager which is now owned by Amvescap.

The sale of Jupiter will bring to an end a 12-year relationship between the UK fund manager and Commerzbank. The German bank first bought a 75 per cent stake in the business for £175m in 1995, paying a further £500m for the remaining 25 per cent in 2000.

Jupiter's flamboyant founder John Duffield quit the firm after a public row with Commerzbank in 2000, going on to set up New Star Asset Management - now one of Jupiter's main rivals. Mr Duffield has already built New Star up to a similar size to Jupiter in just five years.

Jupiter remains one of the strongest brands in the retail fund management market, with its star fund managers such as Tony Nutt and Philip Gibbs among the most respected and successful in the City.

Commerzbank and Jupiter declined to comment last night.