City National to Buy L.A. Money Manager

City National Corp., founded 47 years ago as a bank for Hollywood movie stars, on Tuesday said it agreed to buy Reed, Conner & Birdwell, a Los Angeles money manager with $1.1 billion of client assets.

The move is part of the larger global trend of consolidation among companies in different financial sectors. Mergers have been joining banks, brokerages, insurance companies and money-management firms as rules previously banning such combinations have come down.

City National said it will acquire Reed Conner with stock and notes to be paid over five years. The value of the transaction will be determined by Reed Conner’s profit in coming years.

The acquisition will boost Beverly Hills-based City National’s assets under management to $17.8 billion. Reed Conner’s four principals agreed to sign employment contracts with the bank. The money manager is headed by Donn B. Conner.

“Given our strong focus on growing stable asset-management income and expanding our investment products and services for our clients, this is a logical and positive step forward for City National,” said Russell Goldsmith, City National chief executive.

Reed Conner, which primarily focuses on “value” stocks, manages money mainly for wealthy Californians and pension funds in the Midwest. The firm, founded in 1959, also manages two stock mutual funds available to small investors.

City National, which claims its customers include 40 of the top 100 wealthiest residents of Los Angeles, wants to manage money for even more rich Californians, and might make more acquisitions of money managers, according to Vernon C. Kozlen, head of the company’s investment business.

City National shares fell 19 cents to close at $34.38 in trading on the New York Stock Exchange.