Deutsche Bank pursuing Fortis NL unit: sources

ZURICH (Reuters) - Germany's Deutsche Bank (DBKGn.DE) is looking to buy Fortis Prime Fund Solutions as it seeks to bolster its hedge funds administration and custody arms, sources close to the matter told Reuters this week.

"Deutsche is definitely the front runner for FPFS and could probably get it for a very good price," a person close to the matter said, asking not to be named.

The news came a day after Deutsche Bank ended talks to buy a bundle of assets from Dutch nationalized bank ABN AMRO, complicating the Dutch government's plans to merge it with Fortis Bank Nederland, which the state also took over in October.

Fortis Bank Nederland controls FPFS and a sale of the unit may help satisfy European Commission conditions for the union.

The deal would also allow Deutsche Bank to turn its hedge fund administration arm, currently a relatively minor player, into a major powerhouse since FPFS manages some $200 billion.

Both Deutsche Bank and Fortis Bank Nederland declined immediate comment.

The European Union has said an ABN/FBN merger will only be allowed after the sale of ABN AMRO's commercial bank HBU, 13 advisory branches and two corporate client units.

FBN had struck a deal with Deutsche Bank in July 2008 for such a sale but the German bank said on Thursday it had withdrawn from those talks.

Analysts said the Dutch government may find it easier to dispose of parts of Fortis instead and Dutch Finance Minister Wouter Bos told state broadcaster NOS it could look to sell other assets to other buyers to satisfy EU competition requirements.

FBN has already sold its tax advisory business Intertrust and the Dutch state has put its insurance unit ASR up for sale.

Separately, sources said Deutsche was negotiating the fund administration mandate for Swiss-based fund of hedge funds EIM, which was founded by flamboyant financier Arpad Busson, who was once married to supermodel Elle McPherson.

"EIM is in the process of conducting a project to set up a dedicated fund platform and will seek to convince a number of the funds EIM uses to set up on that platform," said EIM partner Bill Glass in an interview.

"The selection process has not yet been completed,"

Glass did not say which administrators were being considered. (Reporting by Martin De Sa'Pinto in Zurich, additional reporting by Ben Berkowitz in Amsterdam and Philipp Halstrick in Frankfurt, Editing by Lin Noueihed)