Alliance Trust Outsources £3.3 Billion Portfolio In Strategic Overhaul

Arti Mehta, Reporter, 17 January 2017


Shareholders will vote on the new approach at a general meeting on 28 February 2017.

Alliance Trust has set out a new approach to managing its equity portfolio, handing over management to eight equity managers.

The firm will outsource management of its £3.3 billion ($4 billion) portfolio to Willis Towers Watson, which has selected the eight equity managers from the UK, US and Canada.

Each manager selects around 20 stocks, which will make up the trust’s combined portfolio. WTW will maintain oversight of the combined portfolio, including income, risk and concentration characteristics.

The target for the equity portfolio to outperform the existing benchmark (the MSCI All Country World Index) will be doubled from 1 per cent to 2 per cent per annum, net of costs, over rolling three-year periods. Additionally, by leveraging the scale of Alliance Trust and WTW, total annual costs will be targeted to be below 60 basis points.

Various news sources have reported that the new approach comes as a result of pressures from infamous activist investor Elliot Advisors.

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