Monks Investment Trust has agreed to merge with the Independent Investment Trust, as the latter’s manager, Max Ward, prepares to retire.
The boards of the trusts said they had agreed heads of terms for the proposed combination, which will see the voluntary liquidation of Independent and its assets rolled over into Monks. Independent is a self-managed trust, run by former Baillie Gifford partner Ward, while Monks is managed by a team at the Edinburgh fund group.
Independent’s board said this option was in the best interest of shareholders given the impact Ward’s retirement would have on the £230m trust. Ward has been managing director and full-time portfolio manager of Independent since launching it in 2000. Before this, he was James Anderson’s predecessor on the Scottish Mortgage Trust.
The response from shareholders to the proposed changes was overwhelmingly positive, with Independent’s shares up 18% at £4.79 apiece at the time of writing. Monks’ shares dipped 1.5% to £10.25.
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Independent shareholders will benefit from greater scale and resources
Independent’s board said shareholders would benefit from the expertise and depth of resources of Baillie Gifford’s Global Alpha team, which has run Monks since 2015. Spencer Adair took over as the lead manager on the £2.5bn trust following the retirement of another Baillie Gifford veteran, Charles Plowden.
Initially, when Independent was launched it was billed as a global growth trust but over time it has shifted its focus to the UK market.
Monks’ much larger scale means it has more ample liquidity than Independent, which the board said was “attractive against an uncertain geopolitical background which may prove persistent”.
Shareholders will be able to elect to receive new shares in Monks or opt for a full cash realisation for part or all of their holding.
Like most of the funds in Baillie Gifford’s stable, Monks and Independent have had a rough time following the devastating rotation away from growth stocks. Both have lost around 27% in the past year compared to the IT Global and UK All Companies sectors, which have fallen 13% and 22%, respectively.
