Investment group Commoditrade has bought a controlling interest in a commodities fund with more than £65 million under management.

Investment group Commoditrade has bought a controlling interest in a commodities fund with more than £65 million under management.

The Hertfordshire-based company has acquired AMCO Management Services, the controlling partner of AMCO Commodities LLP, in a deal that could be worth £4 million depending on financial performance of the target business.

AMCO, which has been investing in base metals for the past two years, was sold by Keiron Mathias and Chris Adams for an initial £2 million in cash. The balance is due in four equal instalments within the next 15 months.

Commoditrade already enjoys a profit share agreement with AMCO, in which it is entitled to 75 per cent of its annual net profits. This acquisition is the final step in taking control of the business and, as a consequence, this arrangement has ended.

Commoditrade chief executive David Phipps said the acquisition is part of his strategy to diversify the company’s product range and commodity coverage. “This acquisition solidifies and enhances Commoditrade’s bespoke offering to investors in the base metals market and delivers another stream of earnings into the group.”

In the year to December 2007, AMCO made a £966,000 operating profit on audited revenues totalling £1.6 million. Its assets at that date were valued at £785,000.