Alliance Trust multi-manager approach paying off

Alliance Trust multi-manager approach paying off

Craig Baker

Willis Towers Watson (WTW), the multi-manager firm appointed two years ago by Dundee-based Alliance Trust’s to control its investments has said the move has meant that from April 2017 to the end of March this year the equity portfolio return before fees was 15.1 per cent against the MSCI All Country World Index of 14.3 per cent.

Craig Baker, global chief investment officer for WTW, will today tell Alliance Trust shareholder’s at the firm’s 131st annual general meeting at the Apex Hotel in Dundee today that the multi-manager approach had worked well.

WTW manages a group of eight global equity managers who each have a portfolio of up to 20 stocks.



There is also a ninth fund for emerging markets which can contain up to 50 stocks.

Speaking ahead of the meeting, Mr said: “It’s been a tough period for active management and it’s pretty pleasing to see our outperformance in the past two years,” he said.

“As you might expect with a multi-management approach, different managers have fared very differently.

“In particular large cap quality growth managers have done very well whereas more value orientated managers have struggled, but when you put them together, there’s a pretty good outcome.”

Mr Baker added that there were no plans to change any of the equity managers, and in fact it may be the case that more managers may have to be recruited.

“When we put this in place we said we’d have between six and 12 managers and that it would normally be eight to 10. We started with eight and we haven’t changed at all in the first two years.

“We’ve no concerns with managers.

“Each manager has different philosophies but they are all quite longterm in their outlook.

“If anything we’d increase the number of managers rather than reduce the number.”

It is also expected that shareholders will be updated on the sale of Alliance Trust Savings (ATS), which is one of the major UK sharetrading platforms.

Interactive Investor agreed a £40 million deal to purchase ATS and its Dundee headquarters in October but the deal is still to be rubber-stamped by regulators.

If approved it will mean that around 300 Dundee-based staff will switch to Interactive Investor.

Approval is still expected in the first half of this year.

Mr Baker told the local Courier newspaper that the ATS sale will add to the funds available for equities, which have already been boosted by the sale of other “non-core” assets.

“One of the big changes to the trust over the last couple of years has been increasing the focus as being an equity trust,” he added.

“When we took over about 10 per cent of the assets were in non-core assets, be that ATS, private equity or mineral rights.

“At the end of December equities was 97.4 per cent and once the ATS sale goes through it will be almost 100 per cent.”

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