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Laxman Pai, Opalesque Asia:

The global fund manager City of London Investment Group (CLIG) has agreed on an all-share takeover of US fund manager Karpus Management Inc.

CLIG's money management subsidiary, City of London Investment Management Co., has $5 billion in assets under management. Karpus Management is a U.S.-based investment manager with $3.5 billion in AUM.

According to a press release, the acquisition of Karpus is in line with CLIG's strategic plan to expand its U.S. presence. Karpus's closed-end specialty is also a new segment for the UK group, it added.

"The consideration is GBP78.4mln based on a share price of 325p and will boost the investment group's US presence and diversify it away from the volatile emerging markets segment," CLIG said.

As a result of the merger, the founders and management team of Karpus Management, Inc. will become significant stakeholders in the combined business. The investment management teams at CLIM and Karpus Management, Inc. will remain physically, and from a regulatory standpoint, separate and unaltered post-merger.

The investment management teams at CLIM and Karpus Management will remain separate and unaltered entities, the release noted.

Many of CLIG's operational functions are already based in the US and will remain so following completion of the merger. Tom Griffith will remain as Global Chief Executive and will be based in Coatesville, Pennsylvania and report to the CLIG Board of Directors.

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