Projo Biz Blog

Two mutual funds that invest mainly in Rhode Island municipal bonds plan to combine forces.

The Ocean State Tax-Exempt Fund will essentially merge into the Narragansett Insured Tax-Free Income Fund, the funds said in a statement.

Shareholders of the Ocean State fund, which is managed by Van Liew Capital, Inc. of Providence, have approved the plan to have the fund become part of the Narragansett fund, which is managed by Aquila Investment Management LLC of New York, and sub-advised by Citizens Investments Advisors of Providence.

The combination, scheduled to be completed later this month, will create a single, larger fund, with the Narragansett name. It will have combined assets of about $180 million.

"This transaction represents a tremendous opportunity for shareholders of two very similar funds to potentially realize lower expenses due to the combined assets," said Diana P. Herrmann, CEO of Aquila Investment Management and vice chair of the Narragansett Fund.

"We appreciate the Ocean State shareholders' vote of confidence, and we look forward to serving their investment needs over the years to come,'' she said in a statement.

Under terms of the reorganization, each shareholder of Ocean State will become a shareholder of Narragansett.

Each share of the Ocean State fund will be exchanged for shares of the Narragansett Fund with a value equal to each shareholder's holdings in Ocean State.

"This is a perfect fit at an ideal time," said Alfred B. Van Liew, chairman of Van Liew Capital and president of Ocean State.

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