London-based Pareto Investment Management, a currency risk management specialist, is to be folded into Insight Investment Management in a deal intended to boost the latter's expansion plans.

The merger between the two BNY Mellon-owned firms is expected to complete on 1 January 2013, assuming regulatory approval is granted. The deal, for which financial terms were not disclosed, also includes some of Pareto’s affiliated entities.

Upon completion of the transaction Pareto will remain a separate regulated entity within the Insight group; Pareto’s investment team will become one of Insight’s specialist investment units, the firms said in a statement.

Pareto has £27 billion ($42 billion) in assets under management (as at end-June, representing currency exposure). The firm has operations in the UK, the US, Japan and Australia, and Insight believes that Pareto's presence in North America and the Asia-Pacific region will provide it with a solid platform for its continued expansion.