Alliance Trust, one of Britain’s oldest and most respected investment trusts, announced a merger with its rival Witan Investment Trust to create a £5-billion giant.
Witan will roll its assets into Alliance in order to create a vehicle large enough to be eligible for inclusion into the FTSE 100 Index of Shares.
The aim is to create an “all-in-one” investment platform for retail investors that will have a net asset of approximately £5 billion and be named Alliance Witan.
Dean Buckley, chairman of Alliance in Dundee, said that shareholders will benefit from the proven investment processes implemented by Willis Towers Watson and access to world-leading stock pickers.
“This is a momentous occasion for our industry as a whole: Alliance Witan represents an important milestone in the development of the investment trust, which has proven its effectiveness over many decades.”
The merger of two FTSE-listed trust vehicles brings two of the most prominent names in the industry together. Alliance traces its roots back to 1888 when it was created by Dundee-based businessmen as a means to invest in American mortgages. The company is now an investor in the stock market, with stakes in the American technology giants Alphabet and Microsoft, as well as the financial giants Visa, Mastercard, and Amazon.
Witan, a London-based company, was founded in 1909 by Alexander Henderson, 1st baron Faringdon to manage his estate. It joined the stock exchange 15 years later.
In morning trading, Alliance shares rose by 0.5 percent to a value of about £3.4 billion. Witan stocks rose by 4.2 percent to a valuation of more than £1.6 million.
The two said that the move was triggered by Andrew Bell’s decision to retire in March as chief executive of Witan, after serving for more than 14-years. The Witan board conducted a review of its strategy, according to Andrew Ross, chairman. “An extensive process was undertaken to identify the most suitable candidate to manage the assets of our shareholders.”
He said that the board had evaluated a number very strong proposals including single-manager candidates who have impressive track records. The board unanimously recommended the combination with Alliance Trust. This allows us to continue our multi-manager approach while paying lower fees in a larger and more liquid vehicle.
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