Zeus acted as Financial Adviser and Sole Broker to City of London Investment Group (CLIG.L) which has entered into an all share Merger Agreement to acquire Karpus Management Inc. (KMI), a US-based investment management business, on a debt free basis, for a consideration of £78.4 million.
KMI is a US SEC-registered investment adviser, providing investment management services primarily for US high net worth clients and small corporate accounts. As at 31 May 2020, KMI had US$3.4 billion in funds under management for 2,273 client accounts. Most client assets are managed in balanced portfolios, with over 50 per cent. invested in CEF and CEF-preferred securities. KMI employs 36 staff including 11 that perform investment advisory functions, including research.
CLIG intends that KMI will continue to operate as a distinct entity and a fully operational business within the enlarged entity.
The Directors believe that the merger with KMI is highly complementary and represents an opportunity for significant diversification, which is in line with CLIG’s strategic plan and will reinforce CLIG’s presence in the US where it is already very well established. The acquisition has the potential to be earnings enhancing for the first full financial year following completion*.
*completion is subject to Shareholder Approval and Admission