Aberdeen Standard Investments (ASI) will close its ASI UK Recovery Equity fund on 22 October after years of underperformance, according to a letter sent to investors.
The fund, managed by Wes McCoy since 13 May after manager Andrew Hunt was dropped, ranks bottom of the IA UK All Companies over one and three years with returns of -34.1% and -54.1% respectively, compared to the sector's return of -5.8% and -4.4% over the same periods respectively, according to data from FE fundinfo.
The letter stated that "the largest investor has confirmed their intention to redeem their shareholding in the fund, which constitutes a substantial proportion of the assets of the fund", leading to the fund being "unable to benefit from economies of scale", which may cause "problems in buying and selling assets at a reasonable price, which in turn may lead to compromised investment performance and proportionally higher costs".
As such, the fund will close on 22 October 2020, with underlying assets to be liquidated and proceeds returned to investors.
Investors may either redeem their holdings and receive redemption proceeds within the timescales outlined in the prospectus, switch into another fund managed by ASI, or wait until the fund is closed and receive redemption proceeds three business days after the closure date.
The firm has agreed to meet the expenses of the closure, "including expenses of the auditors and other professional advisers", with the exception of "any transaction costs involved in liquidating the assets of the fund".
ASI declined to comment.