Alliance Trust platform sale splits shareholders

ATS represents a third of the investment trust’s shareholder base

Alliance Trust shareholders are split over its potential sale of the eponymous platform business, according to a board member at the investment trust.

In July, the investment trust revealed it was mulling the sale of Alliance Trust Savings (ATS) via its half-year report. ATS represented 1.3% of the global equities portfolio with a valuation of £38m for the period ended 30 June.

It had £16.2bn assets under administration (AUA).

 ‘Why the hell haven’t you sold it off?’

The board hasn’t decided whether it will sell the investment platform, said board member Clare Dobie. She said investment trust shareholders were “pretty divided”.

“We get almost as many ‘why the hell haven’t you sold it off?’ as ‘you must keep it, you can’t possibly sell it’ comments,” she said.

The platform was valued at £38m in July, representing 1.3% of the investment portfolio.

ATS sale pros and cons

Alliance Trust Savings is a “great business in a sector that has got a super future”, she said. “That might be a good reason for keeping it.”

However, the board needs to consider what is in the best interests of shareholders.

“We’re an investment trust with a global equity portfolio so where does it sit in that structure now. There are pros and cons which is why we are considering the issue and have not come to a conclusion yet,” she said.

Alliance Trust shareholder register complicates sale

The shareholder register would be one of the key considerations behind any change of ATS ownership, Winterflood Investment Trusts said in an analyst note in July.

ATS represents 34% of the investment trust’s shareholder base worth approximately £900m.

Winterflood otherwise welcomed a potential sale, stating the platform had consumed management time and represented just a small allocation within the portfolio. “We suspect that the board will focus on the security of its Dundee-based workforce as well as releasing the value of the business,” said research analyst Simon Elliott.

Liontrust a good home for Alliance Trust Investments

In December 2016, Alliance Trust confirmed it was selling its in-house manager Alliance Trust Investments to Liontrust Asset Management.

Willis Tower Watson is now the outsourced manager, which oversees eight high-conviction managers with global equity portfolios totaling approximately 20 stocks each.

Dobie said Liontrust had proved a “jolly good home” to the Alliance Trust Investments team.

Liontrust officially acquired ATI in April 2017 for £30m.

Tags: | |

Leave a Reply