** Platinum Asset Management PTM.AX set for 20% weekly gain, its strongest performance on record

** Stock up 5.9%

** Fund manager announced it was in discussions with investment manager L1 Capital for deal to create A$18 bln ($11.55 bln) funds management group

** If deal proceeds, L1 Capital would own ~75% of combined entity, with the Australian firm holding the rest

** About 2.1 mln shares traded, almost same as the 30-day avg

** YTD, stock down 2.5%

($1 = A$1.5591)

(Reporting by Sneha Kumar in Bengaluru)

((Sneha.kumar@thomsonreuters.com;))