Alliance Witan (ALW) has made two changes to its panel of external fund managers, dropping ARGA Investment Management after just 18 months and also letting go Sustainable Growth Advisors (SGA).
ARGA, a Stamford, Connecticut global value fund manager was only added to the panel of stock pickers in April last year after the then Alliance Trust decided not to retain Jupiter’s Ben Whitmore after he left to set up his own firm.
Alliance Witan, a £4.9bn, FTSE 100-listed multi-manager fund, gave no reason for de-selecting ARGA’s chief investment officer A Rama Krishna who had been allocated 9% of its portfolio, or for removing HK Gupta, Alexandra Lee and Kishore Rao, managers of the SGA Global Growth fund, who had run 11% of assets.
In their place Alliance Witan’s investment adviser Willis Towers Watson (WTW) has chosen two other US asset managers, Brown Advisory and Artisan Partners.
Based in Baltimore, Maryland, Brown Advisory is a growth house with $172 bn of assets under management. Mick Dillon and Bertie Thomson, managers of its $4.4bn Global Growth fund will pick 20 stocks for Alliance Witan.
As will value fund manager Dan O’Keefe of Artisan Partners in Milwaukee, Wisconsin. O’Keefe is a founding partner of the firm that has $178 bn of assets and looks for undervalued high quality businesses. He runs the $2.8bn Artisan Global Value fund.
Craig Baker, chair of the Alliance Witan investment committee at WTW, thanked SGA and ARGA for their contributions. “Both managers remain highly respected firms, but we keep the line-up under constant review and now have stronger conviction in the new combination of managers to add significant value for Alliance Witan shareholders,” he said.
The manager changes comes as the investment trust seeks to regain momentum after the transformational merger with rival Witan last year. In the 12 months to 31 August the trust made an underlying return of 6.7% against 12.6% from the MSCI All Country World index. Over five years it has generated a total return for shareholders of 71.6%, below the benchmark’s 73.4%.
Our view
James Carthew, head of investment company research at QuotedData, said: “ALW investors may look at the news of the appointment of Brown Advisory to the manager line up and think nervously about the poor track record of its only other presence in the London-listed investment companies market, as manager of Brown Advisory US Smaller Companies (BASC). However, Brown Advisory is a big firm and the new ALW managers follow a very different approach to the managers of the US smaller companies trust. The team working for ALW has a global, quality, growth style. Interestingly, when analysing stocks it starts from the position of: is the end customer happy? I like the thinking behind this.
“Artisan Partners, the other new addition to the line up, is a value manager with a global remit but a bias to the US. Two observations on that – it illustrates ALW’s approach of not being too dependent on the success of any one investment style, and it also reminds us that US value stocks have been neglected by investors in a market dominated by mega-cap tech companies.”
