Alliance Trust unveils first manager change under Willis Towers Watson

Alliance Trust has introduced a value manager with a large weighting in Amazon and Alphabet in its first manager change since investment manager Willis Towers Watson took over.

Vulcan Value Partners becomes the ninth fund manager in the multi-manager investment trust and has a large exposure to the tech giants despite having value in its name.

Vulcan CIO C T Fitzpatrick, who founded the $12bn Alabama firm in 2007, will be lead portfolio manager on the Alliance Trust account.

AJ Bell head of active portfolios Ryan Hughes said: “Despite the name, the approach is not classical value with arguably much more of a quality value tilt, as evidenced by the significant allocation to technology stocks with both Alphabet and Amazon appearing in the top 10.”

Speaking to Portfolio Adviser, Hughes added: “This probably blends well with the more traditional value managers already held in the portfolio and takes down some of the overall value exposure versus its benchmark which may well have been part of the reason why the trust has underperformed its benchmark this year.”

Vulcan has added to the high conviction stock picking nature of the underlying managers in the portfolio, he added.

Value manager with quality approach

Craig Baker, chairman of the Alliance Trust investment committee and global chief investment officer of Willis Towers Watson, said: “What differentiates Vulcan from other ‘value’ managers is the team’s focus on capital preservation and long-term compounding opportunities.

“The team focus on finding a small number of very high-quality businesses with the ability to compound in value over the long term, that they would want to own if the share prices ever become discounted. They then take advantage of market volatility for buying opportunities, instead of being a victim of it.”

Vulcan recently reopened to new investors for the first time since 2015 and will employ a concentrated, best-ideas approach when picking stocks for the Alliance Trust portfolio.

At the end of August, the nine stock pickers produced a portfolio of around 200 holdings. Willis Tower Watson took over the portfolio in April 2017.

Baker added: “We believe that the best way to deliver long-term outperformance to investors is to combine the best ideas from the best stock pickers globally into one highly active but diversified portfolio and offer it at a competitive fee.”

Alliance Trust portfolio