The Investment Company (INV ), the £14m self-managed minnow that last month announced it was considering winding down, has turned to UK smaller company specialist Chelverton about giving the flexible global fund a new lease of life.

Following a review of available opportunities, Investment Company chairman Ian Dighé said the 155-year-old company had entered into discussions with Chelverton about the managers of its £1bn open-ended UK Equity Growth fund taking on the running of the fund. 

Managed by James Baker (the small and mid-cap veteran formerly of Rathbone and ABN Amro), alongside Edward Booth and Henry Botting, the MI Chelverton UK Equity Growth fund is the top-performing fund in the IA UK All Companies sector since its launch in October 2014.

According to figures from the company, as of 28 February it had generated a 222% total return placing it ahead of 190 funds in the peer group.

In the past year, it has slipped to the fourth quartile, down 8% over 12 months compared to the 3% average rise in UK All Companies funds.

Investment Company shareholders will also be given the option of a full cash exit.

If Chelverton is appointed fund manager, David Horner, the founder and managing director of the Bath-based boutique, will join the Investment Company board as a non-executive director where he will serve unpaid. 

He is also manager of the £39m Chelverton UK Dividend (SDV ) investment trust and the £387m Chelverton UK Equity Income fund.

Michael Weeks, a non-executive director who is a member of the investment team at Edelweiss Holdings, a Jersey holding company that owns 26% of the shares, would step down.

The statement said certain Chelverton staff would subscribe for shares in the trust, while the remaining directors would retain their holdings.

At half-year results last month, Dighé highlighted the illiquidity of the shares and their 20% discount as a barrier to Investment Company’s growth. The shares rose 2.4% to 302p today, having closed yesterday 16% below net asset value (NAV). 

Investment Company has a mediocre long-term record. Over ten years shareholders have received a total return of 79.8%, ahead of the FTSE All Share’s 74%. That’s not bad considering the underlying growth in NAV has been just 30.1%, according to Numis Securities data.