The man who controls Alliance Trust’s multi-billion investment portfolio will update shareholders at the finance giant’s 131st annual general meeting today.
Willis Towers Watson (WTW) was appointed to oversee the Dundee-headquartered firm’s investments two years ago.
It 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.
Craig Baker, global chief investment officer for WTW, said the multi-manager approach had worked well .
From April 2017to the end of March this year, the equity portfolio return before fees was 15.1% against the MSCI All Country World Index of 14.3%.
“It’s been a tough period for active management and it’s pretty pleasing to see out 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, who will present at today’s AGM at the Apex Hotel in Dundee, said there were no plans to change any of the equity managers.
He said it was more likely that additional managers may 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 the managers.
“Each manager has different philosophies but they are all quite long-term in their outlook.
“If anything we’d increase the number of managers rather than reduce the number.”
Shareholders will hear today that the sale of Alliance Trust Savings (ATS), which is one of the major UK share-trading platforms, is still to be rubber-stamped by regulators.
Interactive Investor agreed a £40 million deal to purchase ATS and its Dundee headquarters in October.
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 said 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% 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% and once the ATS sale goes through it will be almost 100%.”