Aberdeen Asset Management and BlackRock are to ask shareholders for permission to merge two investment companies.
The Aberdeen UK Tracker Trust and the BlackRock Income Strategies Trust would have a combined £500 million (€586.6 million) of assets under management.
Aberdeen’s diversified multi-asset team, which is led by Mike Brooks and Tony Foster, will manage the trust if it gains shareholder approval in March 2017.
The trust will be re-named the Aberdeen Diversified Income and Growth Trust plc and would target a total return of 5.5% above Libor net of fees over rolling five-year periods. Volatility is expected to be “well below” that of equities.
Aberdeen said the trust would build on the “experience and success of the managers” with similar open-ended portfolios but with the added benefit of a broader range of less liquid investments that could enhance returns and income.
Investments include listed equities, property, social and renewable infrastructure, emerging market bonds, loans, asset-backed securities, insurance-linked securities, private equity, farmland and aircraft leasing.
Brooks said: “Investors are looking for consistent performance from their investments[and] multi-asset investing is a good base from which to deliver that but many portfolios are too dependent on simple equity and bond allocations.
Aberdeen has £90 billion of assets under management within multi-asset portfolios and manages 19 UK-listed closed-end funds.
The trust will also propose management fees charged at 50 basis points on the first £300 million of net assets and 45 basis points thereafter, and says the ongoing charge will be one of the lowest in its peer group.
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