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Tom Winnifrith, co-manager of the SF t1ps Smaller Companies Growth fund, said the new vehicle would invest in small gold and precious-metals companies and be run similarly to the smaller companies fund.

The gold fund will be managed by Mr Winnifrith and Robert Sutherland-Smith, with the added support of Malcolm Burne, chairman of Rivington Street Holdings.

Mr Winnifrith said the fund would be launched "within the next four weeks".

He added: "We will be backed by Malcolm, who, in addition to being chairman of Rivington Street Holdings, our parent company, is also a very big name in mining.

"He used to run a company called Golden Prospect Precious Metals. While he was in charge, the net asset value of the stuff he was investing in went from around 5p to 60p in four years.

"That was down to good stock selection, so, with Malcolm with us, we are very confident this fund is in the right place at the right time."

Regarding the Smaller Companies fund, Mr Winnifrith said the firm would continue in the same vein that had seen the portfolio return 21.4 per cent over one year, according to Morningstar. Over the same period, the average loss for the IMA UK Smaller Companies sector was 22.6 per cent.

Mr Winnifrith said he was "happy to be patient" and would not rush into investing in any companies. He cited the example of software firm Access Intelligence, in which he has been slowly building up a stake over the past 10 months.

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