UPDATE 1-Julius Baer buys Italian asset manager Alpha SIM

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ZURICH, May 25 (Reuters) -Julius Baer (BAER.VX: Quote, Profile, Research) is buying Alpha SIM, a Milan-based independent asset manager for wealthy clients, for an undisclosed sum, Switzerland's biggest dedicated wealth manager said on Monday.

Alpha SIM specialises in portfolio management and advisory services for high net worth individuals and has around 400 million euros ($559.8 million) in assets under management, Baer said.

Julius Baer said last week it was splitting its private bank and asset management operations into two separately listed units, a move investors welcomed as shielding its cash-generating businesses from troubled hedge fund arm GAM. [ID:nLK568689]

The economic downturn has put huge pressure on asset managers to consolidate if they are to reach the critical mass needed to survive in a tough environment. Julius Baer has said repeatedly it is well capitalised and is on the lookout for good takeover candidates.

Alpha SIM will merge with Julius Baer's onshore private client business in Milan, Julius Baer SIM, in a transaction expected to complete in the second half of 2009. (Reporting by Jason Rhodes, editing by Will Waterman)