Former Ruffer Investment Companies (RICA) fund manager Duncan MacInnes is joining Aberforth Partners, the Edinburgh-based UK smaller companies specialist. In doing so he has added his voice to those calling out a turning point in the depressed sector’s fortunes.

MacInnes left Ruffer in February, a month after its flagship RICA investment company formally reported a second consecutive year of share price losses, a “painful moment” for the £856m wealth preservation fund.

As a follow-up to his 13 years in Scotland’s capital at the multi-asset boutique, MacInnes announced on LinkedIn that he was pleased to be moving down the road to Aberforth, a value-style fund manager with which he had personally and professionally invested since 2020, he said.

The famously media-shy Aberforth did not comment on MacInnes’ statement or say in what role he would be joining the partnership next month. It runs two investment companies: the flagship £1.3bn Aberforth Smaller Companies (ASL) and the £91m Aberforth Geared Value & Income (AGVI).

MacInnes, who began his career at Barclays Wealth, praised Aberforth for its “rare discipline, stewardship, and intellectual honesty”.

More importantly, for investors, he described UK smaller companies as possibly the “most attractively mispriced asset class in the world”.

Raising the prospect that the next stage of his career could be aligned with a turnaround in UK small-cap fortunes, MacInnes described the sector as a “coiled spring” poised to unwind from a “layer upon layer of discounts” caused by US exceptionalism, growth beating value and domestic investors abandoning the UK.

“The constant drumbeat of M&A” in bids and takeovers of British companies, he suggested, was a sign that the “old-fashioned notion that price and value eventually converge”.

MacInnes’s switch from a defensive pursuit of real assets, gold, inflation-linked bonds, a smattering of blue-chip stocks and even cryptocurrency, to a pure UK smaller companies strategy, may be born from conviction or necessity, or even a combination of both.

Whichever way it is, his conversion comes at an interesting time. The Deutsche Numis Smaller Companies index, excluding investment companies, has risen nearly 15% in three months, which is nearly as much as the 16.8% average shareholder return from UK small-cap trusts over the past three years. The recent rebound reflects broader market optimism about the impact of US tariffs but also the hope that the UK stock market may be about to come in from the cold. With trusts such as Aberforth Smaller trading on average discounts of around 10% below asset value, the opportunity that MacInnes has pronounced is still very much available to buy.