Aberdeen to shut shrinking UK flexible strategy fund

The wealth manager said that it had taken the decision after “steady redemptions” had significantly shrunk the fund’s assets to £10m.

In a letter to the shareholders - who in August had refused a proposed merger of the fund into the Aberdeen’s £664.5m Multi-Asset fund - the firm said the fund will now close on 22 February 2016.

The fund, currently run by Tony Foster, used to be managed by James Clunie and has shrunk in size from £50m since he left to join Jupiter in August.

The company said: “The fund has experienced steady redemptions over a significant period of time, and we anticipate that this trend will continue.

“The size of the fund is now sub-optimal and our recent proposal to merge the fund into another product did not receive shareholder approval. Aberdeen now believes it is in the best interest of shareholders to redeem all shares and close the fund.”

Aberdeen also said it expects “increasing levels of cash outflows” from the fund in advance of the closure.

It said: “Any such outflows will be monitored and a dilution adjustment may be charged in accordance with the terms of the fund prospectus to protect remaining shareholders”.