Edinburgh-based asset management giant Aberdeen Standard Investments said it is closing its underperforming ASI UK Recovery Equity Fund on October 22 after the fund’s largest investor confirmed its intention to redeem its shareholding.
The fund has assets of only £52 million and the investment company said small funds “face a number of operating difficulties as they are unable to benefit from economies of scale.”
In a letter to investors, Aberdeen Standard Investments said: “We are writing to notify you of our decision to close the ASI UK Recovery Equity Fund on 22 October 2020.
“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.
“Small funds face a number of operating difficulties asthey are unable to benefit from economies of scale.
“This may lead to problems in buying and selling assets at a reasonable price, which in turn may lead to compromised investment performance and proportionally higher costs.
“Following consideration of the available options, we believe it is in the best interest of all shareholders to close the fund, liquidate all of the underlying assets and return the proceeds to investors.”
Aberdeen Standard manages about $650 billion of assets worldwide and is the asset management business of Edinburgh-based Standard Life Aberdeen plc.