Abrdn has announced a proposed merger of Abrdn Smaller Companies Investment Trust (ASCI) and £67m Shires Income.
If the proposals are approved by shareholders of both trusts, ASCI will merge into the Shires Income trust.
Shires Income is currently the largest shareholder in ASCI.
The firm said that, if approved, the enlarged Shires Income trust will draw its income from a variety of sources including UK large, mid and small-cap listed companies. Its investment objective will remain unchanged, though its small-cap exposure will become direct.
It will also see the introduction of an administration fee and reaching the second tier of fees for assets over £100m. The benchmark will remain the FTSE All-Share index.
William Hemmings, head of closed-end funds, Abrdn said: “We are very pleased to support this sensible consolidation of two relatively small funds focussing on UK income and we believe that Shires Income will continue to offer private investors an attractive income and good liquidity in its shares through the use of its capital structure and active investment management of the portfolio, headed by Iain Pyle and with the support of the UK equities team, including the UK small cap team.”
ASCI’s average discount over the last 12 months stands at 13.2%, compared to 1.5% for Shires Income, according to AIC data.
Over a five-year period, Shires has returned 17.8%, compared to the AIC UK Equity Income sector average of 16%, according to data from FE Fundinfo.
