The Courier & Advertiser (Fife Edition)
Shareholder vote to agree new fund managers
Investors to have their say
Alliance Trust shareholders are to have their say on proposals to overhaul how the group’s billions are invested.
An extraordinary general meeting will be held next month with the only topic for discussion being the proposal to move to outsourced fund managers.
The trust does not have to put the new structure to the vote, but investors will be given the opportunity to register their view and the result will be binding.
That could mean the plan to bring Willis Towers Watson (WTW) in as new investment manager failing, although management are confident of securing shareholder backing for their plan.
Non-executive director Clare Dobie said WTW will give investors access to the world’s best fund managers.
WTW will oversee eight independent fund managers, each tasked with creating a bespoke investment portfolio.
Ms Dobie said: “When shareholders see the benefits of using WTW, I am sure they will be very happy, and happy to vote for it.”
The radical changes follow the decision by the trust last month to sell off its in-house asset manager ATI.
It followed months of upheaval after the trust’s former senior management team was called out by activist investors over corporate governance issues and investment performance.
The new managers – three of whom are located in London, four in America and one in Canada – will each oversee between £400m and £500m of the trust’s cash and will report into WTW chief investment officer Craig Barker and his co-portfolio managers David Shapiro and Mark Davis.
The new structure will be more expensive but the trust expects costs to be offset by improved investment returns and said it is committed to maintaining its 49-year track record of increasing dividends.
The new managers have a target to outperform the MSCI All Country World Index by 2% per annum, a doubling of the previous 1% target.
Mr Davis said WTW was pleased to be working with the Dundee-based trust.
He said: “We have a long history of researching investment managers from across the globe and we go out and find the very best.”
Chairman Lord Smith of Kelvin said: “Under the new approach, Alliance Trust will offer access to best-in-class managers, which, together with a focus on only their best investment ideas, will help to increase the likelihood of consistently delivering improved performance over the long term.”
The new managers are: Bill Kanko of Toronto’s Black Creek Investment Management, Pierre Py and Greg Harr of LA-based First Pacific Advisors, Rajiv Jain of GQG Partners of Fort Lauderdale, Ben Whitmore of London’s Jupiter Asset Management, Andrew Wellington of Lyrical Asset Management of New York, Hugh Sergeant of London’s River and Mercantile Asset Management, George Fraise, Gordon Marchand and Rob Rohn of Sustainable Growth Advisers of Stamford and Andy Headley of Veritas Asset Management of London.
Investor forums will be held in the coming weeks and the general meeting will take place at Edinburgh’s EICC on February 28.