UK - Henderson Global Investors plans to merge its £3.3bn ($5.2bn) Liquid Assets Fund into the money market fund range of DB Advisors over regulatory concerns.
Under the proposal the Henderson fund (HLAF) will be merged with DB Advisor's £223m Deutsche Managed Sterling fund. DB Advisors is the institutional investment management arm of the £460bn Deutsche Asset Management.
Both are sterling-denominated, treasury-style money market products.
Henderson is proposing the merger after a review of its cash investment business earlier this year suggested global regulators could subject treasury-style money market funds to banking regulations.
"Henderson is an independent investment manager and does not seek to offer banking products and services to its clients," Henderson fund said.
The company therefore recommended seeking an alternative manager operating within the banking regulatory model. DB Advisors was chosen and has managed the fund on a sub-advisory basis since12 October.
Henderson said the performance of Deutsche's fund was comparable to its own and shareholders in the merger portfolios "would also be able to participate in the greater diversity of investment opportunities arising from DB Advisors' scale, extensive investment resources, and broad range of fixed income and liquidity management capabilities".
The proposal will be voted on by HLAF shareholders in January 2011. If approved, HLAF will be merged into the Deutsche Managed Sterling Fund in February 2011.
Mark Bolton, DB Advisors UK chief executive, said: "We would be delighted to extend our relationship with investors in HLAF and welcome them as direct clients. Investors in HLAF already have access to DB Advisors' global investment management expertise.
"The fund merger would bring HLAF onto DB Advisors' liquidity management platform, giving the fund's investors all of the other advantages that a large global player like Deutsche Bank can provide. They will be joining a platform with deep resources, a robust credit process and a strong commitment to transparency."
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