Aviva Investors is to close its UK Special Situations fund after one of its managers, ex-Schroders UK equities head Richard Buxton, joined Old Mutual Global Investors.
Aviva Investors launched the fund in 2006 under its previous guise as Norwich Union, with both Buxton (pictured) and his former colleague Andy Brough given a dual mandate to run the portfolio.
Billed as a collection of both managers' best ideas, Norwich Union seeded the fund with about£200m, although it never grew substantially and is currently £376m in size.
Although it lacked popularity, with most investors choosing to buy Buxton or Brough via their own Schroder portfolios over the following seven years, the fund has outperformed the UK All Companies peer group over major time periods.
In the last year alone it delivered 32.6%, well ahead of the sector average return of 24.1%, while over three years it returned 48.9% versus an average gain of 47.5%, according to Morningstar.
Aviva Investors said in a statement: "We can confirm we are in the process of closing the Aviva Investors UK Special Situations fund. This fund is managed by Schroder Investment Management, and as a result of recent organisational changes at the firm, the fund's largest investor has decided to withdraw their investment.
"Our priority is to protect the interests of our current investors and we believe it will not be in their best interests to remain in the fund as it will be too small to be run effectively."
Aviva Investors said it is offering existing investors the option to switch into another of the group's funds free of charge, or else cash in their investment.
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