Alliance Trust and Witan investment trust have entered into heads of terms to merge, thereby forming Alliance Witan.
The merger, which follows a strategic review from Witan’s board, comes following the retirement of Witan’s CEO Andrew Bell (pictured).
After Witan’s assets are rolled into Alliance trust, the new investment company will have net assets of approximately £5bn.
See also: Andrew Bell retires from Witan triggering management review
The merger will maintain a multi-manager approach to investing in global equities, overseen by Alliance Trust’s investment manager WTW. Alliance Trust will therefore see its investment process unchanged, with the bigger trust investing in a selection 10-to-20 of their best trust ideas.
According to the boards, the enlarged trust will become an “even more liquid, high-profile and cost-efficient ‘one-stop shop’” for global equity investors, with eligibility for FTSE 100 inclusion and “well-established brands” from both investment companies.
Dean Buckley, chair of Alliance Trust, said: “The formation of Alliance Witan brings together the two leading open-architecture multi-manager investment company propositions in the UK to form a FTSE 100 equity investment vehicle with the quality, cost efficiency and profile to play a leading role in the UK investment market.
“Shareholders will benefit from access to the proven investment process implemented by our investment manager, Willis Towers Watson, and access to the world’s leading stock pickers. This is also a significant moment for our industry in broader terms – Alliance Witan represents a key milestone in the history of the investment trust structure which has demonstrated its capabilities very effectively over many decades.”
He added: “Witan was an early adopter of the multi-manager solution and, on behalf of my board, we congratulate Andrew Bell and his team on all that they have achieved during their tenures. Combining our two historic companies, established in 1888 and 1909 respectively, recognises the attractive opportunity to deploy the investment strategy, which has been proven to be robust through the investment cycle, at significantly greater scale.”
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Andrew Ross, chair of Witan, said since Andrew Bell announced his intention to retire, the company’s board has been through “an extensive process to identify the best candidate to take on the management of our shareholders’ assets”.
“The board assessed a number of very strong proposals, including single-manager candidates with impressive track records. However, the board was unanimous in recommending the combination with Alliance Trust, which allows the continuation of our multi manager approach at lower fees and in a larger, more liquid vehicle.
“The companies share similar cultures and a mutual desire to provide a ‘one-stop shop’ for retail investors in global equities. I am delighted to announce this transaction, the largest ever investment trust combination, in Witan’s 100th year as a quoted company on the London Stock Exchange.”
This story was originally written for our sister publication, Portfolio Adviser
