F&C to merge Doel’s UK Opportunities

F&C Thames River is to streamline its UK fund range next month by merging two of its UK equity funds into larger offerings.

The group is proposing to merge Phil Doel’s £63m UK Opportunities fund into the £150m UK Equity fund, run by head of UK equities Peter Lees.

It is also planning to merge the £31m UK Growth and Income fund, run by Hilary Aldridge, into Doel’s £192m UK Equity Income fund.

Under the proposals, Aldridge would become deputy manager of the fund.
The move will allow Doel to focus on managing the group’s UK equity income franchise, while Lees heads up UK growth, the group said.

Shareholders will cast their votes for the proposals in an extraordinary general meeting on June 15, with the mergers completed at the end of June if given the green light.

There will be no changes to either fund’s investment objectives.

As part of the overhaul, the UK Equity fund will also be renamed the F&C UK Alpha fund.

The group said the name change will better reflect its investment philosophy, after the portfolio moved to a more high conviction and concentrated mandate since Lees took over in 2009.

Lees has revamped the fund to resemble his long-standing institutional UK High Alpha product, taking larger bets against the index than the average fund in the UK Equity Income sector.

His approach has helped the fund outstrip peers, returning 22.6% in the last year, compared to the average return of 16.2% from funds in the IMA UK All Companies sector.

The Income portfolios have similar performance, returning 20.1% and 19.8% over the past year, ahead of the average return of 16% in the UK Equity Income sector.

The mergers follow similar moves by peers including M&G, which is understood to be planning the merger of its Dividend and Income portfolios, both headed by Alex Odd.

Further changes to product ranges are expected from other fund houses ahead of RDR.

The proposed changes by F&C are subject to shareholder approval.

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