Invesco Perpetual UK Smaller Companies (IPU) is offering to return £17m of capital to compensate shareholders for the double-digit discount at which its shares trade.
The £177m listed fund has taken the unusual step of choosing a special dividend to return up to 10% of its capital, rather than use share buybacks or a tender offer.
Chair Bridget Guerin said the board opted for this method as the least expensive way to return a relatively small sum. A tender offer would cost the company more in stamp duty, she said.