Faith Glasgow, AIC Compass, 12 July 2024:
It seems that the investment trust arena is gripped by merger mania, with a record six mergers completed in the first half of 2024 alone and more completing or in the pipeline.
By far the largest and most high-profile of these deals – indeed, the largest merger ever to take place – is that of the multi-manager behemoths of the Global sector, Witan and Alliance Trust. It awaits shareholder approval but is expected to complete by October. The end result will be a global multi-manager trust overseen by Alliance Trust’s manager, Willis Towers Watson (WTW), and worth more than £5bn.
The deal, precipitated by the retirement of Witan’s chief executive Andrew Bell, will mean WTW takes the helm of the whole portfolio. That involves reallocating Witan’s assets to Alliance Trust’s current ten-strong stable of specialist managers, though possibly retaining some of the existing Witan managers (two of which are already operating across both portfolios).
“There are no capacity constraints among our managers, so the additional assets don’t create any issues,” adds Alliance Trust senior director Mark Atkinson. “We’ve always said the optimal number of managers is between eight and 12, and we don’t envisage moving out of that range.” The Witan/Alliance trust marriage appears to be not just a very big but also a very comfortable match. “Both trusts share similar cultures and a mutual desire to provide a ‘one-stop shop’ for retail investors in global equities,” comments Andrew Ross, chair of Witan.
The combination is likely to appeal to many investors, producing “a single multi-manager trust of significant scale with an imaginative portfolio of hard-to-access managers that is very difficult to replicate”..
“It creates a real sector champion – large, liquid, good track record, sensible and easy to understand investment proposition, decent yield – that ticks a lot of boxes,” enthuses James Carthew, head of investment companies at QuotedData.
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