Standard Life Investments is preparing to soft-close Harry Nimmo's £1.1bn UK Smaller Companies fund in June.
In a letter sent to clients this morning, the group said it is seeking to quell soaring inflows, allowing Nimmo more flexibility to hold meaningful positions in small-cap stocks and prevent liquidity problems.
Jacqueline Kerr, the group's head of UK wholesale, said the soft-closure will be implemented by charging new investors a full initial charge of 4%.
She added the soft-closure will be implemented by charging new investors a full initial charge of 4%.
"We have taken this decision in the interests of protecting existing investors, ensuring the flexibility of this mandate to invest across the Hoare Govett Smaller Companies universe is not compromised by the volume of assets under management," said Kerr.
"With the exception of the closed-ended Standard Life UK Smaller Companies trust, the investment universe differs for all other mandates run on our Smaller Companies desk.
"Therefore these mandates run by our UK Smaller Companies team are not impacted by this move."
The group also plans to raise the annual management charge from 1.5% to 1.6%, and will write to investors outlining the proposal in the next couple of months.
The fund, which launched in 1997, returned 73.7% over the five years to 18 April compared to the Smaller Companies peer group average of 23.5%, according to Morningstar.
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