Old Mutual Global Investors (OMGI) is proposing to merge away the Skandia UK Best Ideas fund of funds next month, Investment Week can reveal.
The £118m fund, launched in 2006 and managed by Lee Freeman-Shor, will merge into Simon Murphy's £80m Old Mutual UK Select Equity fund on 11 March, subject to a vote by investors later this month.
OMGI said the two funds represented "an area of overlap" in its fund range following the merger of Old Mutual Asset Managers and Skandia Investment Group into OMGI.
"The two funds have similar targets and we believe investors will be best served by combining these into one vehicle," OMGI said in a statement.
The other Best Ideas funds are unaffected by the proposal, with Freeman-Shor (pictured) continuing to manage the £45m Skandia UK Strategic Best Ideas and £273m Skandia Global Best Ideas funds.
Targeting a long-term total return from investment in UK securities, Skandia UK Best Ideas splits its portfolio equally across mandates run by OMGI and five external fund groups.
Those mandates, each representing around £20m in assets, are run by Artemis' Tim Steer, Liontrust's James Inglis-Jones, BlackRock's Richard Plackett, Old Mutual Global Investors' Daniel Nickols, Schroders' Richard Buxton and F&C's Peter Lees.
The fund was criticised by Hargreaves Lansdown in January 2012 for its "disappointing" returns but it has since seen a turnaround in performance.
Over the year to 8 February, Skandia UK Best Ideas has returned 25.6% compared with an IMA UK All Companies sector average return of 16.6%, according to Morningstar.
The fund is also top quartile over three years, but remains bottom quartile on a five year view, returning 6.4% compared with a sector average return of 29.4%.
Meanwhile Old Mutual UK Select Equity, which will shortly be renamed Old Mutual UK Equity, has returned 19.4% over one year and 33.4% over five years.
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