First Aurora Investment Trust, the UK closed-end fund, is issuing more shares, and because they now know they are being covered from the United States, they are not letting us subscribe. To comfort us for this discrimination (the result of SEC regulations making a capital increase hard for a fund), they are giving us a special 2 pence dividend which will not be available to the newbies. The issue will be done on 13 March at the NAV of the fund plus a premium to cover the placing expenses, aiming to raise 2 mn pounds. This is the third capital increase by the offshoot of the Phoenix open-end fund.

Bigger news is also coming from Britain. Our Standard Life is taking over Aberdeen Asset Mgm. Aberdeen runs mostly emerging market funds and has suffered considerable outflows in recent months, and it has cut back on its Scottish-linked PR parties which featured kilted fund managers, haggis, and whisky tasting.

We own two Aberdeen closed-end yield funds which are not particularly prone to buying emerging markets bonds, FAX, Aberdeen Asia Pacific Income Fund, and FCO, Aberdeen Global Income which we have owned longer than Aberdeen managed them.

The combo will create an outfit with about $811 bn in assets under management. SLFPY will control 2/3 of the new entity but former Aberdeen CEO Martin Gilbert will be co-manager. His fund group has seen 15 quarters of net withdrawals, almost all from emerging markets funds. Aberdeen now manages a quarter less money than 4 years ago, about $370 mn. Standard has cash on hand partly because it has hit delays to its plans to offer insurance in India, and has suffered as well from fund underperformance, in this case of its Global Absolute Strategies mutual fund (GARS) which managed to lose money last year while the London stock market (its benchmark) soared after the Brexit vote.

The new entity will aim to improve GARS and give SL entree into investment trusts (the British version of closed-end funds.) Together the combination will become the UK's biggest stand-alone fund manager and also boost the ranking of Scotland, where both funds have their HQ. Mr Gilbert is a director of Rupert Murdoch's Sky plc and Sky News broke the story yesterday and got it confirmed today.

It may have been the whisky (it certainly wasn't the haggis) that led me to consider buying shares in the Aberdeen fund management company 3 years ago when Mr Gilbert said he wanted to boost business in the USA. But I realized it was too focused on Third World countries to thrive in all markets and then with Brexit and the Trump victory I stopped thinking about Aberdeen.

If the Fed hikes rates as expected this month emerging markets will be hit with higher costs for their often-dollar-denominated debt, exactly what Aberdeen was buying. This will increase the rush for the exits, but now there will be a deep-pocket insurance company to hold the doors open.