Fundamental Tracker Investment Management, the Glasgow-based group founded last year by former City fund manager Rob Davies, is in talks with its 49.9% shareholder City of London Group about a merger.

City of London this week announced the appointment of a new chairman, David Walton Masters, and a new phase of development.

Davies is seeking to raise £60m, as highlighted by The Herald last week, for his innovative Munro Fund which tracks the best dividend-paying companies in the FTSE-350.

Masters commented that the talks were exploratory and there could be no certainty of a merger, which would be subject to regula- tory approval. How-ever, he said: "There is no reason why a similar product can't be applied to American, European or Asian stocks."

Masters added: "We believe in Rob's expertise and experience, we are looking to build our interests in financial services, and we think his concept is capable of further development."