KARACHI - MCB Asset Management Company Limited, a completely owned subsidiary of MCB Bank Limited, is set to amalgamate with Arif Habib Investments, the sub-entity of another one of the top financial groups in Pakistan, to expand further its business operations and diversify the range of mutual funds by providing better returns to the individual and institutional investors as well. Both companies are seeking necessary approval from the Security and Exchange Commission of Pakistan to commence due diligence and to calculate swap ratios. If both firms are amalgamated, then it foresees the combined entity will become the first or second largest asset management company in Pakistan by income and size of assets. In addition to that, the proposed merger will increase the operational efficiency and positioning of both, MCB and Arif Habib mutual funds in the days to come. According to the information dispatched to KSE on Tuesday, the AUM of MCB Bank Ltd, considering merging its affairs with Arif Habib Investment Limited as part of its strategy to improve and strengthen its asset management business. This will help the merged entity to offer more diversified range of fund to its customers. Subject to all regulatory approvals, it will start negotiations with the management of Arif Habib Investments Ltd to conduct due diligence of the said co of MCB, MCB said. Similarly, at the same time, Pakistan Premier Funds Limited on the behalf of the Arif Habib Investments Limited also notified KSE that the sponsors of both companies have entered into discussions to think about a possible merger of the two entities as both sponsors believe that the combined force of MCB and AHI will boost the asset, management business across the mutual funds industry and offer attractive profit rates to the investors on income and equity typed funds. It may be mentioned that the total assets under the management of MCB Asset Management Company surged by Rs2 billion to Rs14.05 billion in January 2010, compared with Rs11.64 billion during December 2009, showing 20.78 per cent MoM increase in growth. The assets of Arif Habib Investments amounted to Rs10.81 billion during January 2010 from Rs9.71 billion in December last year. In the same month the assets of the company registered a MoM growth of 11.23 per cent, showing Rs1.09 billion increase in its total assets during the month under review. MCB Asset Management Company offers four different categories of open-end mutual funds i.e. MCB cash management fund, MCB dynamic allocation and cash funds and MCB dynamic stock fund. Arif Habib Investments Limited is an Asset Management Company managing both open and closed-end mutual funds. The company manages about Rs 16.959 billion ($196.626 million) in 13 mutual funds as of 28th February 2010.