Witan drops two managers to up active share

Witan drops two managers to up active share – Following a review of its five managers with a global equity remit, Witan has decided to consolidate the previous five portfolios into three, under the management of three of its existing managers. Lansdowne Partners (UK) LLP, Pzena Investment Management and Veritas Asset Management will each manage approximately 14.3% of Witan’s overall assets (as at mid-May 2017). At the end of April 2017, they each managed between 10% and 13% of Witan’s portfolio. The additional funds will come from the closure of the accounts managed by MFS Investment Management and Tweedy, Browne Company LLC, which managed 5% and 3% respectively.

Following this change, Witan will have nine external managers (covering UK, European, Asian, Emerging Market and Global markets), all of whom adopt an active management approach. In addition the Company’s Executive team invests up to 10% of the assets in a range of collective funds covering specialist asset classes and actively adjusts the Company’s gearing according to the degree of opportunity that the markets are perceived to offer.

Witan’s CEO, Andrew Bell commented, “The reason for the changes is to increase the performance potential of the overall combined portfolio. Although manager risk diversification is one of the benefits of the multi-manager approach, there is a balance to be struck between the resulting reduction in performance volatility and having a structure with the potential to deliver attractive levels of outperformance, which requires the portfolio to differ significantly from the index. One, albeit imperfect, measure of this potential is Active Share – the degree to which a portfolio differs from its benchmark (with 0% being a replica of the index and 100% having no holdings in common). On this measure, Witan’s combined active share is expected to rise from 70% at the end of 2016 to 74% following this portfolio transition. 

Witan continues to seek to increase the active content within its combined portfolio, to improve the potential to deliver good capital returns and build on our record of 42 consecutive years of dividend growth. We would like to thank both Tweedy, Browne and MFS for their stewardship of our shareholders funds over a number of years (since the inception of our multimanager approach in 2004, in the case of MFS).

WTAN : Witan drops two managers to up active share

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