Update: Neptune to merge away underperforming UK fund

Neptune Investment Management is set to merge its UK Equity fund into its UK Special Situations fund and rename it as Neptune UK Opportunities, subject to regulatory approval.

The £20.4m Neptune UK Equity fund, managed by Scott MacLennan, has delivered fourth quartile performance in the IMA UK All Companies sector in the past three years.

Mr MacLennan also runs the £35.2m UK Special Situations fund, having taken over management from Alex Breese in April this year. Mr Breese is set to join Schroders later this year.

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It is expected that the merger will go through on November 1.

A statement from Neptune said: “The proposed merger would help Neptune to make use of the economies of scale that a combined entity would offer.

“Both the UK Special Situations and UK Equity funds currently aim to produce returns in excess of the FTSE All-Share Index by investing principally in UK equities, and this would continue to be the case for the Neptune UK Opportunities Fund.”