T Bailey is proposing to merge its £9m equity income fund into its £162m growth fund.
The firm says the equity inc-ome fund is not economically viable due to its size and that merging it into the flagship growth fund will mean the latter can absorb the costs associated with running the vehicle.
Both the growth and equity income funds are managed by chief investment officer Jason Britton. The equity income fund launched in 2004 and is currently fourth quartile in the IMA UK equity income sector over three years. The growth fund is currently third quartile over three years in the IMA global growth sector.
An EGM of unitholders in the equity income fund will take place on December 22 and, if approved, holdings in the equity income fund will be transferred across to the global growth fund on January 21, 2011.
Chelsea Financial Services managing director Darius McDermot says: “This has become commonplace for funds that lack in size and demand and there is bound to be more of this.”
T Bailey was unavailable for comment.