Harry Nimmo is to add the £168m Dunedin Smaller Companies investment trust to his responsibilities at Aberdeen Standard Investments.
Mr Nimmo has run the £1.5bn Standard Life UK Smaller Companies open ended fund for 21 years, and also the £430m Standard Life UK Smaller Companies investment trust.
Dunedin Smaller Companies trust had been managed by Aberdeen. In a statement to the stock exchange this morning (21 June), the board of the Dunedin Trust, which has been a serial underperformer in the smaller companies sector, said that, subject to shareholder approval, it would merge with the Standard Life vehicle run by Nimmo.
The opportunity arose as a result of the merger of Aberdeen and Standard Life investments last year.
The Dunedin trust had returned 77 per cent over the past five years, compared with 110 per cent for the average trust in the AIC UK Smaller Companies sector.
The announcement is subject to shareholder approval.
Dunedin said it expects the dividend on the combined trust to be, over the longer term, lower than that offered by the Dunedin trust as a standalone vehicle.
James Barnes, the trust’s chairman, said: "Dunedin Smaller Companies Trust's size and the secondary market liquidity in its shares makes it challenging to attract new investors.
"The proposed merger with Standard Life UK Smaller Companies trust will resolve these issues, creating a merged trust with assets of over £550m and substantially greater secondary market liquidity.
"As Standard Life UK Smaller Companies Trust has consistently had a substantially stronger rating than the Company, the Board believes that the merger will result in shareholders benefiting from a significant increase in the market value of their investment."
David.Thorpe@ft.com
