Three Federated mutual funds are set to swallow three Sentinel funds if Sentinel fund shareholders approve the adoption this fall.

The deal is Federated's fourth so far this year, and follows its recent purchase of quantitative equity manager MDT Advisers. Federated president and CEO J. Christoper Donahue described the deal as part of Federated's ongoing growth plan.

"Federated continues to seek opportunities like this one in order to grow our assets under management," Donahue said.

Federated Investors Inc.'s Federated New York Municipal Income Fund, Federated Pennsylvania Municipal Securities Fund and Federaed Municipal Securities Fund will buy Sentinel Asset Management's Sentinel New York Tax-Free Income Fund, Sentinel Pennsylvania Tax-Free Trust and Sentinel Tax-Free Income Fund, Federated announced Thursday. The Sentinel funds have assets totaling $93 million. The boards of directors of all six funds have already unanimously approved the acquisition.

"Acquisitions of this type allow Sentinel shareholders to leverage Federated's investment expertise, competitive performance and product breadth," Donahue said in the release. "Federated fund shareholders also benefit from the increase in assets to the existing funds."

Sentinel president and CEO Christian W. Thwaites cited Federated's specialties as a benefit for Sentinel shareholders.

"The [Sentinel] Board recommended Federated," Thwaites explained in the statement, "because the Sentinel municipal bond fund shareholders will benefit from the scale and depth of Federated's tax-exempt management capabilities." 

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