Aberdeen Asset Management has proposed to merge three struggling smaller funds into its £56.3 million Multi-Manager Equity Managed Portfolio.

The move, which is subject to investor approval, will see Multi-Manager UK Growth, Multi-Manager International Growth and Multi-Manager Emerging Markets portfolios merged into the larger fund.

All three funds have performed poorly against their relative sector average in the past three years, in particular Multi-Manager Emerging Markets. It returned 15.79 per cent in the past five years against an IMA Global Emerging Markets sector average of 42.57 per cent.

The Multi-Manager UK Growth Portfolio has returned -8.31 per cent over five years compared with an IMA UK All-Companies average return of 2.14 per cent.

The three additions would almost double the size of the portfolio, adding a further £55.5 million of assets under management (AUM).

Aberdeen has also suggested consolidating two other funds with its £16.8 million Multi-Manager Multi-Asset Distribution Portfolio. The £21.7 million Multi-Manager UK Income and the £14.7 million Multi-Manager Sterling Bond portfolios could both be merged, although again this is subject to shareholder approval.

In a statement, the group said the move to create two larger funds would 'attract new investors' and said expenses should be reduced due to economies of scale.

Graham Duce, co-head of multi-manager funds at Aberdeen, commented, 'These proposals are in the best interests of clients and aim to consolidate our multi-manager range and create portfolios of critical mass. We are seeing interest in multi-manager funds with broader investment remits.'

Investors need to vote before 3 January. If approved, the mergers will take place on 27 January 2012.