By Joia Shillingford

NewMedia Spark, the internet incubator, has agreed to buy New Media Investors, a corporate finance business for £10m in an all-share deal. Michael Whitaker, chief executive, said: "We are interested in NMI because it is regulated by the Securities and Futures Authority (SFA) and is therefore able to charge fees for advice on services like mergers and acquisitions, which we would like to provide."

Another factor was that NewMedia Spark wanted to reduce the management fee of 2 per cent it paid for NMI to manage its funds. Mr Whittaker said: "This was reasonable when we only had £5m under management but is getting expensive now we have a £175m fund."

New Media Investors' holdings in companies like Last minute.com, the internet travel company, and ARC International, the chip design company, are being put into a separate company called Glasshouse Associates.

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