Brierley said Nimmo had added significant value over the long-term after the board of the investment trust "took decisive action" in 2003 by moving the management contract and appointing a manager with a proven track record.
"This has been rewarded with a dramatic transformation in fortunes," he said, "Although given a focus on high quality growth stocks his portfolios will struggle during dash-for-trash markets."
Brierley added that while the Oeic has attractions for larger investors, given the illiquidity of the underlying universe (UK smaller companies), there must come a point when size materially impacts portfolio flexibility and performance.
Perhaps as a result of this, the investment trust has not only outperformed the Oeic by 3.3% compound over five years, but has also outperformed it in 16 of the past 21 quarters, or three-quarters of the time.
In its most significant quarter of outperformance (Q2 2011) the investment trust was up 6.2% on the unit trust, while its largest underperformance came in Q2 2009 when it lagged the Oeic by 5.8%.
Only in three other quarters during the past five years did the closed-end fund fall short of the open-ended offering in terms of performance (Q3 2007, Q4 2008 and Q3 2011).
Oeic impressive too
But that is not to say the Oeic is a laggard, as since 1998 the total return on the open-ended fund is 469% compared to 255% from the Numis ex Investment Companies Index and 95% from the FTSE All Share Index. This represents compound outperformance of 3.9% and 8.6% respectively.
Brierley warned, however: "This impressive long-term record has been punctuated by four distinct periods of underperformance, typically associated with ‘dash-for-trash’ underlying market conditions, in 1999, 2003, 2009 and 2011.
"We believe the dash-for-trash phase is over and with increasing emphasis placed on quality and visibility of earnings, we see the manager extending an impressive record. The recent de-rating is a buying opportunity."
