The trust will by run by Smith’s fund management business, Fundsmith, which the city veteran founded in 2010.

At launch, the Smithson Investment Trust will invest in 25-40 companies out of an investable universe of 83 companies identified by the team.

Simon Barnard and Will Morgan will manage the trust on a day-to-day basis, while Smith will provide advice and support in his role as chief investment officer.

The trust will apply Fundsmith’s self-proclaimed “proven investment strategy”: buy good companies, don’t overpay, do nothing.

Smith currently manages the hugely popular £17bn Fundsmith Equity fund, which mainly targets large-cap stocks.

He was the top performing manager in the UK last year, delivering twice the returns to investors than the passive equivalent.

The new investment trust is seeking to raise up to £250m via an initial public offering (IPO). Shares will be available via a placing, an offer for subscription and an intermediaries offer.

A placing refers to attracting institutional investors, an offer for subscription is for general retail investors and an intermediaries offer lets brokers and advisers buy on behalf of their clients.

Terry Smith, chief executive officer and chief investment officer of Fundsmith, said: “Last year we hired Simon Barnard and Will Morgan from Goldman Sachs to research the opportunity presented by applying Fundsmith’s proven investment process to companies typically smaller than the ones the Fundsmith Equity Fund would invest in, hence the name Smithson.

“I am delighted that Simon and Will will manage the fund, with my oversight as Fundsmith’s Chief Investment Officer. I will be investing £25m in Smithson at launch with fellow Fundsmith partners and employees investing an additional £5m.”