Shares in Abrdn Smaller Companies Income (ASCI ) have soared 14% after the board of the £68m portfolio said it was looking to merge with another investment trust.

Launching a strategic review of the 30-year closed-end fund, which last week trailed on a 20% discount, reducing its market value to just £54m, chair Dagmar Kershaw said a merger with a ‘suitable’ trust was among the options and could be accompanied by a ‘cash exit’ for investors who wanted to withdraw their money. 

Kershaw said the 4% dividend yielder, which holds a small number bonds alongside UK small-cap shares, had traded at a ‘material discount’ to net asset value (NAV) for a long time and ‘coupled with the company being of a small scale, has created challenges in generating improved liquidity in the company’s shares and will also restrict the company’s ability to grow over time.’

Managed by Abbie Glennie, deputy head of smaller companies at Abrdn, and Amanda Yeoman, the trust has seen its shares lose a quarter of their value in the past year, underperforming the FTSE Small Cap index, which fell 9%. Its 10-year total return of 90% also trails the benchmark’s 129%.

Glennie also runs the flagship Abrdn UK Smaller Companies Growth (AUSC ), which Harry Nimmo retired from last year, making it a likely merger candidate. ASCI shares jumped 34p, or 13.8%, to 280p. AUSC added a penny to 470p on an 11% discount.