GERMANY (Bloomberg) — Commerzbank AG, Germany’s second-largest bank, agreed to sell its Jupiter fund division to TA Associates and the unit’s management for $740 million ($1.45 billion), five years after first seeking a buyer for the business.Jupiter International Group is represented in Bermuda by Jupiter Asset Management (Bermuda), and has been operating on the Island since 1969. It is currently based in Victoria Street.

Frankfurt-based bank Commerzbank will book a gain of about [EURO]300 million ($399 million) from the sale. TA Associates, a Boston-based buyout firm, joined Jupiter managers including chief executive officer Edward Bonham Carter in the purchase.

Jupiter, founded by John Duffield in 1985, has about $36 billion of assets, mainly in UK mutual funds, and employs about 450 people. The German bank scrapped a planned sale of Jupiter in 2002 after failing to get the price it sought, and last year said it was considering a share sale of the unit.

Private equity firms “are being very aggressive and driving up the prices” of asset managers, said Ben Phillips, managing director at Putnam Lovell NBF Securities, an investment bank specialising in asset managers.

Buyout firms are being drawn to the fund management industry as four straight years of stock market gains boost assets and profits. Hellman & Friedman LLC, known for investing in financial-services companies, last year bought Gartmore Investment Management Plc, manager of Europe’s second-biggest equity hedge fund.

Jupiter’s management will own more than 50 percent of the business, said Bonham Carter, 46 in a telephone interview yesterday. He declined to give further details on the ownership of the company.

Entering the agreement with TA Associates could give Jupiter access to the buyout firm’s capital for possible acquisitions, though Jupiter at present is focused on growing its business without buying rivals, Bonham Carter said.

“It increases the options for us,” he said.

Bonham Carter, who has been sharing the CEO position with Jonathan Carey, will assume full executive responsibility after the buyout, Jupiter said. Carey will become executive deputy chairman.

TA Associates, founded in 1968, has invested in more than 360 companies, including Omaha, Nebraska-based discount brokerage Ameritrade Holding and Hospital Group of America, a Washington-based psychiatric hospital-management company.

“This is TA’s tenth investment in the global asset management sector,” Michael Wilson, a managing director at TA Associates, said in a statement.

Leveraged buyout firms raised an unprecedented $204 billion last year to fund new takeovers, according to London-based Private Equity Intelligence. TA Associates said last March it had raised $4.3 billion for two funds to acquire consumer, financial-services, health-care and technology companies.

Commerzbank was advised by Goldman Sachs Group and JPMorgan Cazenove, while Jupiter management was advised by Lexicon Partners and TA Associates by UBS AG.

Commerzbank expanded internationally during the late 1990s, before stock market declines and bad loans led to losses in 2002 and 2003. Since then, the company has scaled back its international operations and focused on consumer banking and business with small- and medium-sized clients in Germany.

The bank sold its San Francisco-based Montgomery Asset Management unit to Wells Fargo & Co. in 2003.

“We are continuing our strategy of concentrating on our core markets,” Achim Kassow, Commerzbank’s management board member in charge of consumer banking and asset management, said in a statement.