Aberdeen Asset Management is launching the first UK-listed emerging markets smaller companies investment trust next month.

The Aberdeen Emerging Markets Smaller Companies Trust will target up to £150 million in fundraising and be managed by a large emerging markets equity team including Devan Kaloo and Mark Gordon-James.

It will have an annual management fee of 1 per cent.

The trust will complement Aberdeen’s Asian Smaller Companies Investment Trust and its Luxembourg domiciled, US dollar denominated, emerging markets smaller companies Sicav.

It will aim to provide long-term capital growth by investing in listed emerging market smaller companies. Kaloo and his colleagues will have a huge universe to choose from: there are almost 2,000 companies in the MSCI EM Smaller Companies Index.

Aberdeen believes that the smaller companies sector offers greater exposure to the developing consumer story than the large cap universe, due to the wide range of domestic growth focused companies.

Devan Kaloo, head of global emerging markets at Aberdeen, comments: ‘The emerging market small cap sector offers many high quality companies with robust growth prospects within it. As an added benefit, many of these companies are domestic-orientated, allowing investment managers to receive a high degree of exposure to rising emerging market domestic demand.’

He also says the investment universe is under researched: ‘The shortage of third-party coverage of emerging market smaller companies enables managers who do their own research to extract considerable long-term value.’

Stephen Peters, investment trust analyst at Charles Stanley, says there is a gap in the market for this kind of vehicle, and Aberdeen has a strong track record in emerging markets.

He adds: 'My concern would be the discount – if we saw prolonged difficult markets it is easy to see a strategy such as this having a wide discount. Having said that, Aberdeen’s style is that in those type of markets it should perform well, and so perhaps is less of an issue than it would be for other managers.'

The trust will be listed on the London Stock Exchange’s main market. The public offer and prospectus is expected to be available from early June.

The minimum investment via an Aberdeen Investment Trusts Isa is £1,000.

A spokesman says that although the total expense ratio will be dependent on how much the trust raises, it's likely to be less than the TER on the Luxembourg fund, which is 2.13 per cent.

Private investors interested in pre-registering for a prospectus should telephone 0500 00 40 00 or e-mail aam@lit-request.com.