Bluebay Asset Management founders Hugh Willis and Mark Poole enjoy a reputation as two of the bond markets' smartest investors. So their decision to sell the UK-listed fixed-income specialist, which they founded in 2001, to Royal Bank of Canada for £963m is bound to raise speculation they are calling the top of the bond-market boom.

For RBC, the benefits are less clear. A deal will raise its wealth-management profile, and the all-cash offer is a bolt-on for a bank with a £49bn market capitalisation. But RBC is paying a full price, valuing Bluebay at a 29% premium to its Friday closing share price and 19 times its 2010 earnings. European asset managers trade around 12 times earnings; Bluebay's nearest peer, Ashmore Group, trades at 16 times. RBC has little European fixed-income presence and Bluebay no real US footprint, so cost synergies will be negligible.