UK - Threadneedle Asset Management has told its multi-management arm MM to Investment Manager Selection for an undisclosed price.
IMS said it has signed a sale and purchase agreement to acquire all the shares of MM in exchange for the issue of new equity.
The move will add MM's £0.7bn in assets under management - managed mainly for corporate pension schemes in the UK and Ireland - to IMS's £2.8bn.
MM was formerly known as Attica until it changed its name last year. It was set up by former Mercer consultants Guy Davies and Derrick Dunne in 2000. Davies will join IMS as executive director of corporate pensions. Dunne will not join IMS.
"No redundancies are planned as a result of this merger," IMS said. Threadneedle will take stake in IMS, the size of which was not disclosed.
"Of course, our independence will never be compromised and we will ensure that our investigation of other fund managers and fee rate negotiations remain entirely confidential," said IMS chairman Richard Timberlake, perhaps mindful that there will be concerns about information leakage.
A Threadneedle spokesman said there would be a “Chinese wall” in place.
"This deal represents an excellent opportunity for our clients, our staff and both sets of shareholders," Timberlake said.
"It will create a larger and even stronger business, better able to thrive in an increasingly competitive market. The subsequent scale of the merged business will command the attention of the best managers at attractive fees.
"I am very pleased that Guy and his team will be joining us to ensure continuity for clients and to help us grow the enlarged business together."
Threadneedle chief executive Simon Davies said: “Threadneedle has long believed that multi-manager would be a very successful business in which we wanted to have a strategic stake. However, substantial assets under management are important to support a high quality research base.”
He said it had been a “good investment” – but it the difficulty of diversifying the business was now apparent.
The merger is subject to regulatory approval.