Alliance Trust has appointed Willis Towers Watson (WTW) as investment manager, following the board’s announcement in December that the trust will replace its in-house investment team with a multi-manager approach in a bid to improve performance.
The trust is also hiking its performance target within the equity portfolio, doubling it from 1 per cent outperformance of the MSCI All Country World index to 2 per cent per annum, net of fees, over rolling three-year periods. Total annual costs will now aim to be below 60 basis points.
The £3.2bn trust’s objective will remain the same: to consistently delivering the performance target and maintain its 49-year record of dividend rises.
Willis Towers Watson will use eight equity managers, each investing in around 20 high conviction stocks, while WTW will oversee the overarching strategy.
CIO of WTW, Craig Baker, will head the portfolio management with David Shapiro and Mark Davis as co-portfolio managers and Stuart Gray as the lead researcher.
Lord Smith of Kelvin, Chairman of Alliance Trust, said: “Alliance Trust has provided investors with attractive returns and income through many generations. Our ambition is to ensure that it continues to do so, thereby remaining a core holding.
“Under the new approach, Alliance Trust will offer access to best-in-class managers, which, together with a focus only on their best investment ideas, will help to increase the likelihood of consistently delivering improved performance over the long-term.
“We are confident that this new approach, and the managers selected, will meet our ambition and deliver for many more generations to come and we recommend shareholders vote in favour at the General Meeting.”