ABERDEEN Asset Management is to take over the underperforming BlackRock Income Strategies Trust and merge it into its own UK Tracker Trust.

The plan, which requires the backing of both trusts’ shareholders, will result in a combined portfolio with around £500 million of assets under management. It will be managed by Aberdeen’s Mike Brooks and Tony Foster and will be renamed Aberdeen Diversified Income and Growth.

James Long, chairman of the BlackRock trust, noted that the board was disappointed with its performance “over the past 19 months”, leading it to carry out a strategic review of its management.

“Our comprehensive review has reaffirmed our conviction that a well-managed multi-asset portfolio within an investment trust structure is an attractive proposition for shareholders and is highly relevant in the pensions and savings market,” he said. We very much look forward to working with Aberdeen to deliver the performance that shareholders have a right to expect,” he added.

In the six months to the end of March the BlackRock trust’s net asset value fell by 0.9 per cent while in the six months to the end of June the Aberdeen trust’s net asset value grew in line with the FTSE All-Share index at 2.1 per cent.

Aberdeen chief executive Martin Gilbert said the merger was “a significant development for Aberdeen’s [investment trust] business and multi-asset offering” which currently has “£90 billion under management”.

The news comes after Aberdeen this week revealed it had seen net outflows of £32.8bn in the last financial year, but that total assets under management grew by 10 per cent to £312.1bn.