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The resolution to merge the funds was passed with 99.63 per cent in favour, the company said.

Tim Steer, who previously managed the New Star UK Alpha fund, will lead manage the newly enlarged fund, which will keep the UK Alpha name.

There would be no change to the investment remit or process of the fund, the company said.

As for the Special Situations fund, a New Star spokesman noted the Alpha fund was more flexible and invested predominantly in mid-cap and large-cap stocks, as opposed to recovery situations.

The spokesman added Mr Steer's investment process was driven by finding growth at a reasonable price, which New Star believed was more suited to a broader range of market conditions.

Former UK Special Situations manager James Ridgewell will assist Mr Steer in the management of the fund, and will work more broadly as a UK equity analyst on New Star's UK equity desk.

The Alpha fund has returned 34.7 per cent over three years to 18 February, and is ranked 45th out of the 2589 funds in the IMA UK All Companies sector, while the Special Situations fund fell 2.7 per cent, and is ranked 255th. The average fund posted a return of 25.6 per cent over this period, according to Morningstar.