Viewed as a steady, one-stop shop for relatively cautious investors, with gross assets of more than £2.7bn, it's obviously been quite the attraction for a lot of investors and now its care has been handed over by one of F&C's stalwarts.
Jeremy Tigue joined F&C in 1981. He is head of global equities at the group and has recently handed the reins of one of the UK’s largest and best-known investment trusts to Paul Niven ahead of his retirement, planned for later this year.
My kneejerk reaction upon speaking to a handful of investment trust analysts, none of whom had heard of Paul Niven, was one of doubt. Was he the right man to step into such well-worn shoes with no track record in that space?
Were there other likely candidates?
While I saw the jaws of one or two former employees at the group drop, with Peter Lees, Peter Hewitt and Phil Doel mentioned as more anticipated candidates, I think we need to trust the board and its decision.
Niven has headed up strategy and asset allocation since 1999 and applies risk allocation across its multi-asset portfolios and diversified equity mandates, experience which arguably holds more weight than someone with a high profile in the investment trust community.
Ryan Hughes, fund manager at Apollo Multi-Asset agrees, suggesting that with transferable skills, his experience in open or closed ended was largely irrelevant, suggesting in fact that the ability to manage inflows and outflows more easily might have helped his decision.
"It's as much about asset allocation as it is stockpicking, as long as you get the headline calls right and maintain continuity for investors, which he will bring," he adds.
Charles Stanley's investment analyst Stephen Peters commends Tigue for his consistency of performance and dividend growth and for overhauling the portfolio's asset allocation when it was required, introducing a hefty shift into private equity several years ago – the combination of which has served investors well.
F&CIT's performance in share price and NAV terms over three and five years has been largely in line with the benchmark (rising more than 130%) if not marginally above it. He has also increased the dividend every year for 17 years since he took it on, contributing to the trust's exceptional track record of a 44-year consecutive dividend growth.
Big, sensible shoes indeed
The trust remains a good one-stop shop for smaller, entry-level investors, often recommended as a good investment for Child Trust Funds, for example. But Peters believes for larger clients, especially in the wealth management space, there are better global equity managers out there.
"There is an overarching view that as our sector evolves demand for a large, global multi-asset vehicle is falling, certainly for intermediated clients with larger amounts to invest," he says.
As the closed-end structure enjoys the benefits that come with stickier money, with things generally taking longer to move in and out, a strong track record in multi-asset allocation which would point to Niven as the best man within F&C for that job.
It wouldn’t surprise me though, if one of the objectives he was given by the board, along with the mandate was to try and narrow the discount, which has been hovering at roughly 10-12% for about three years.
