Scottish Investment Trust lead manager Alasdair McKinnon (pictured) has delivered a valedictory for the historic closed-ended vehicle ahead of its £1.5bn merger with the JP Morgan Global Growth & Income trust in early 2022.
In October, the board of the £683m investment trust announced it would be merged into the £767m JPMAM vehicle, bringing to an end a strategy that had been in place since 1887. At the time of the announcement, the board touted the JP Morgan trust’s ability to rotate among different investment styles, given the Scottish Investment Trust had taken a hit from its contrarian approach, which had been out of favour for a number of years.
In Scottish Investment Trust’s final annual results, published on Monday, the strategy delivered share price returns of 24.3% and net asset value returns of 15.9%, compared to 29.5% in the MSCI ACWI. The discount on the trust had narrowed on news of the merger with a 12-month average discount of 10.2% compared to its discount today of 5.1%. The JP Morgan trust currently sits at a premium of 2.6%.
Due to the self-managed nature of the Scottish Investment Trust, the board has warned shareholders the merger will take longer than is typical with JPMAM first taking over management of the portfolio on 21 January before the strategies are merged before the end of the quarter.
In the results, chairman James Will said he wanted to place on record the board’s deep gratitude to the in-house “Scottish” team. “All team members are dedicated, enthusiastic and professional and have worked hard in every aspect of their respective roles to deliver for shareholders. The last few years have, however, been a challenging period during which to manage money with a contrarian approach.”
See also: ‘Sad day’ as board seeks end to historic £600m Scottish Investment Trust
Alasdair McKinnon’s valedictory
The results also included McKinnon’s valedictory remarks in which he described his “honour and privilege” at serving the company in various roles over the last 18 years.
“I have always enjoyed my interactions with shareholders over the years, whether in person, over a cup of coffee at the AGM, or in writing and I would be delighted to hear from any of you who wish to remain in touch,” he said.
“Additionally, it has been tremendous working with such a dedicated and enthusiastic in house team. I am grateful to them, and the board, for their support as a niche investment offering was created. This attempted to preserve the very best elements of the self managed model but, at the same time, making the essential changes to ensure the company was relevant for the modern era.”
The team wished the company every success in the future, he said.
“One of the benefits of having occupied the same building since 1889 is access to my predecessors‘ musings which catalogue, with an investor‘s eye, the history of the modern world. There are many lessons to draw but perhaps the most striking is that change is constant. With that in mind, the proposed combination with JPMorgan Global Growth & Income heralds a new era for shareholders of the Scottish Investment Trust.”
See also: What are the benefits of EP Global Opps becoming a self-managed investment trust?
