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Shareholders currently pay a 0.75 per cent management fee each year. However, the changes will see this charge lowered to 0.6 per cent and investors made to pay 20 per cent of returns above 110 per cent of the fund’s benchmark.

F&C Investments said the changes were intended to incentivise the managers to generate superior returns in a universe where few funds deviate widely from the benchmark.

Mike Woodward, head of investment trusts at F&C, said: "People can argue until they are blue in the face about whether performance fees lead to greater returns. The fact is that they are becoming more common and there is an underlying belief in the industry that they do work."

The firm already charges performance fees on its two largest closed-end funds, the £2.5bn Foreign & Colonial Trust and £508.1bn British Assets Trust, as well as a number of other vehicles.

The company’s benchmark is Investment Property Databanks index. The performance fee excludes the performance of the indirect funds held by the group and the impact of gearing.

Paid in each financial year, the performance fee is capped at 1 per cent, including the 0.6 per cent management fee. Performance fees in excess of this capped return can be carried forward for up to two subsequent financial years subject to the annual 1.0 per cent cap.

On 9 June, F&C Commercial Property Trust was trading at a 29.1 per cent discount, narrower than the majority of listed commercial property funds.

Chris Young, analyst at Arbuthnot Securities said the company had performed well over the last year and was perceived to be one of the higher-quality funds in its universe.