City National Buys Boston Investment Firm

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City National Corp. said Tuesday that it has agreed to acquire a majority interest in Lee Munder Capital Group, a Boston investment firm that manages assets for corporations, pension funds, endowments and affluent households.

The Los Angeles parent company of City National Bank said Lee Munder Capital will be merged with Independence Investments, a Boston institutional asset management firm in which City National also holds a majority interest. The combined company will become City National’s primary institutional asset manager.

With more than $4 billion of assets under management, the new entity will operate under the Lee Munder Capital Group name and as an affiliate of Convergent Capital Management LLC, the Chicago asset management holding company that City National acquired in 2003.

“The combination of high-quality product offerings from Lee Munder and Independence will strengthen and diversify the institutional asset management capabilities available to our clients,” said Richard Gershen, executive vice president of wealth management at City National, in a statement.

City National, which also has operations in Nevada and New York, received $400 million in TARP funds, and last month raised around $109 million in a secondary offering.

City National shares were up 53 cents, or 1.5 percent, to $27.11 in midday trading on the New York Stock Exchange.

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