trader jack
16 Jan 2017
New fund managers From today's Daily TelegraphAlliance Trust has unveiled eight fund managers that will take over its investment management as part of a radical overhaul.Before Christmas the £3.6bn investment trust – one of Britain's oldest – announced it was selling its in-house investment business to rival Liontrust Asset Mangement and hiring consultant Willis Towers Watson to oversee the appointment of a panel of third-party managers.The move followed pressure from the largest shareholder, hedge fund Elliott Advisors, which also called for several board members to be replaced.Alliance Trust Savings, the group's investment "platform" business that competes with the likes of Hargreaves Lansdown (Frankfurt: DMB.F - news) , will not be sold in the reshuffle.The managers chosen to run its global stock market investments are: Black Creek Investment Management, First Pacific Advisors, GQG Partners, Jupiter Asset Management, Lyrical Asset Management, River and Mercantile Asset Management, Sustainable Growth Adviser, and Veritas Asset Management.The managers are based in America and Canada as well as Britain.Willis Towers Watson, which advises on nearly £2 trillion of assets, will monitor the managers' performance. The number of companies the trust invests in will rise from around 60 now, to as many as 200.Alliance Trust currently yields 1.7pc and is on the Association of Investment Companies' "dividend heroes" list of investment trust that have paid increasing dividends for at least 20 years. Alliance Trust has paid rising dividends for 49 years.It is trading at a discount to net asset value of 5pc, half the average discount over the past 12 months.Alan Brierley, an investment trust analyst at Canaccord Genuity (Frankfurt: A0B6V4 - news) , said the "unique and innovative" new approach would deliver a "sustained improvement in performance".He predicted the trust would be further boosted by a "more fertile environment for stock-pickers" as central banks begin to step back from the extraordinary monetary policy of the past decade.Earlier this month Questor, the Daily Telegraph's share-tipping column, was skeptical about the trust's new approach , noting Willis Towers Watson's short record as a multi-manager.Lord Smith, chairman of the trust, said: "Alliance Trust has provided investors with attractive returns and income through many generations. Our ambition is to ensure that it continues to do so, thereby remaining a core holding."
trader jack
09 Jan 2017
Re: Share buybacks It is interesting to note that these share buybacks are coming at a time when the shares are trading at historical highs.Surely, Alliance Trust and therefore its shareholders would have a far better effect were the mechanism put in place that the buybacks occurred when the market / share price is falling? It would seem that it will be the directors of Alliance Trust and the firms(s) actually buying back the shares on behalf of Alliance that benefit.TJHSBC seem to have achieved a good buy back result ably assisted by the fall odf sterling against the U.S. Dollar.
Wynford2
09 Jan 2017
Re: Share buybacks And another 637,694 today.If the repurchases stop, then the discount will shoot back up again - surely this is the only logical answer, unless they can keep going long enough to buy out all the dissident voices. which time the trust will be cut down to a much smaller size. One advantage of the new structure is that management fees will be a %age, so the trust can be shrunk without putting up fixed costs. And Elliott, how to they sell up without moving the discount back out again -- are they waiting to force a tender offer as their percentage holding grows, or do they think ATS can be sold for meaningful amount of money, or do they have no more of a clue that me? If I didn't own these shares I wouldn't buy them, so am taking the chance of a sub-5% discount (the first time for at least 10 years) to leave the whole sorry mess behind.
Global IT man
07 Jan 2017
Share buybacks How long can these continue!?1.17m on 5/1422k on 4/1481k on 3/1135k on 30/12398k on 29/1298k on 28/1278k on 23/121.42m on 22/12The buybacks appear to have reduced the discount by around 4%.Are we expecting the discount to rise by this amount when the buybacks stop?Are they hoping to flush out all the sellers?Do they have a plan!?
Charityman
06 Jan 2017
Re: Sell time RCP and WTAN have been reasonable holdings for me: not too exiting but much better returns than a bank deposit.For a bit of excitement try NRI (Northern Investors). The buy/sell spread is enormous (currently 50 points) but even with that I'm up 8% since September.
alandwd
06 Jan 2017
Re: Questor rubbishes Alliance I think Questor was quite polite considering everything! Can't agree with his choice of Witan, one of the benefits of ITs is the big discounts and on that basis, plus a reasonable annual fee, Brunner looks OK to me.
trader jack
05 Jan 2017
Questor rubbishes Alliance This week we depart from our normal task of tipping an attractive investment trust trading at a discount to look at a popular trust that announced a significant change of direction last month.Alliance Trust, which dates back to 1888 and invests globally, is one of Britain’s largest quoted funds at £3.1bn and among the most widely held by private investors. But its recent past has been turbulent and shareholders have endured lacklustre performance relative to global stock markets.The trust has fallen victim to several self-inflicted wounds, which the restructuring announced in December, just as Questor’s Christmas break began, is designed to address.Alliance had saddled itself with a clumsy and complex corporate structure. It established an asset management subsidiary that not only ran the trust’s own money but offered several “open-ended” funds as well. Another arm, Alliance Trust Savings, is an “investment shop” or “platform” that competes with the likes of Hargreaves Lansdown.Both subsidiaries are worth much less than the amount that the trust has spent on setting them up: the asset management arm was valued by Alliance Trust at £19.8m in June, against £45.2m in costs, while Alliance Trust Savings was valued at £54m, against costs of £107.9m.These expensive forays beyond the trust’s core function, along with its poor returns, led to a persistent discount of 10pc or more in recent years. This in turn attracted the attention of an “activist” investor, Elliott Advisors , which lobbied for a change of direction.Elliott’s involvement ultimately led to the restructuring announced last month. The key changes are the sale of the asset management arm, the appointment of external fund managers and a more robust commitment to controlling the discount.Questor wholeheartedly welcomes the first of these decisions, which removes the most serious anomaly in Alliance’s structure. Encouragingly, the trust should receive £25m from the sale, significantly reducing the financial cost of embarking on the venture.However, we would have preferred a sale of Alliance Trust Savings too, even though it is now profitable, as we see it as a distraction. The appointment of outside managers is also positive, although we will have to wait and see whether it does improve performance.Alliance has devolved the task of choosing these managers to a consultancy firm, Willis Towers Watson, so we do not yet know what the trust’s new portfolio will look like in detail, although we know that about eight managers will be asked to provide about 20 “best idea” stock picks each.The new-look trust will be more diversified, with as many as 200 holdings, compared with about 60 now. The focus on “sustainability” seems to have been abandoned.It all sounds fine in theory but we do have misgivings. “Best ideas” funds have been tried before with mixed results at best, while Willis Towers Watson’s existing multi-manager strategy, on which Alliance’s new portfolio will be based, has only a short-term performance record.The new focus on controlling the discount by buying back shares is also to be welcomed. However, the discount has already narrowed considerably to about 4.8pc following the announcement so further improvement seems unlikely.In view of the remaining uncertainties about the portfolio and the continued distraction of the savings arm, we believe that investors would be best advised to sell the trust following this recovery and switch to another global trust, Witan.The latter decided some years ago to adopt the external multi-manager approach now embraced by Alliance and has implemented the change successfully.Despite this, Witan trades at a similar discount of 4.3pc, implying that investors are giving it little credit for being a more stable and predictable proposition than Alliance. There is also the likelihood that Elliott will want to sell its holding at some stage, which would put pressure on the share price and widen the discount.Wi
LK Hyman
22 Dec 2016
Re: Sell time Tony,"does it mean that Captain Hyman has Elliott up there on the fly-bridge as well? No, it's chust me up on the flybridge, m8, alone, alone, all all alone, alone on a wide wide sea.Y'know, I thoroughly disapprove of ATST's whole modus operandi and would never buy their shares in a MILLION years. It was a goddamn disgrace that the board allowed themselves to be bamboozled for so many years by the fragrant KGC though, come to think of it, I might well have succumbed to her undoubted feminine charms mesen if I'd been sat on the board with her like t'other utterly useless NEDs.But now they're not even gonnae pick their own stocks; they're gonnae contract it out to other people ffs, no doubt after having spent an arm and a leg paying some useless snake oil consultant(s) to advise them who to pick as their stock pickers.And, when I look at the stuff they've got in their portfolio I totally despair. They've got 59 equities .... count 'em .... 59! That's a pointlessly long tail ... which represent 96% of their net assets. Plus a contemptible 4% of net gearing and a teensy bit of other stuff which is quite clearly incapable of moving the dial, no matter what happens to it.Frankly, if I was in charge up in Dundee I'd shut the ENTIRE operation down ... in a heartbeat ... sack the staff, sell the office and be done with it.Mind you, come to think of it, I s'pose that, given the continuation of a fairly substantial discount, that is what attracted the Elliott locusts in the first place, so I imagine that, in the fullness of time, they'll finish the business by winding the whole sorry-assed shebang up in the end and garnering that discount for themselves.The IT I like (and hold) is Jake Rothschild's mob, RIT Capital Partners. They're what an IT SHOULD be ... investors in a load of private companies, real estate, hedge funds (well, OK, I don't like hedgies mesen ... bunch of time wasters mainly) as well as the usual lump of equities and fund managers ... but not too much of the latter.But ATST? Nah ... it serves no useful function other than to provide chunky fees for a few members of the Scottish establishment.LKH on the flybridge tracking steadily east nor' east
Wynford2
22 Dec 2016
Re: Sell time I have no way of knowing what Elliot think, but if they aren't using this chance to exit then they must believe, as I do, that this is unfinished business.No doubt the board will cling on; more consultants will earn big bonuses doing more strategic reviews, but at the end of the day Alliance Trust Savings doesn't fit with the Investment Trust anymore and will have to go its own separate way. The only question is whether anyone will want to buy it and if so keep the big office block and staff in Aberdeen. Then is there still a tender offer at NAV to wait for?D C Thomson, a very long term shareholder has dumped 8,000,000 shares yesterday, although they still have 18,000,000. With the discount showing at 5.4% this morning surely everyone who is thinking about leaving will take the opportunity. How much more buy-in firepower does the company have left to keep the discount this low?
Tony Proudfoot
22 Dec 2016
Re: Sell time I was much more interested in what people thought of the additional purchase by Elliot of additional shares so soon after the announcement of the strategic review. Does it mean that Eliott are happy and think this is good investment going forward or do they think that like Captain Hyman that this is a none too clever strategic outcome and that more that should be done. I am not too sure that they have commented either?Alternatively, does it mean that Captain Hyman has Elliott up there on the fly-bridge as well? Perhaps together they can assist us in navigating forward?
redcoat1
21 Dec 2016
Re: Sell time Too right. I knew Gavin well - he was at Business School with me 1969-71. and was a typical Scottish finance man - keep the costs down, hold the headcount and look to the long term. He has a farm in the West of Scotland now. A regular guy who kept Alliance lean but still delivered a a dividend increase each year.
alandwd
20 Dec 2016
Re: Sell time Remember when the annual fee was 0.3% and a guy called Gavin Suggett used to be presented as making the investment decisions. Where's theat Scottish frugality gone? Even before the recent NAV raids, the city insiders had got their claws on this one sometime around 2000 and starting taking their cuts.
Ben Alligin
20 Dec 2016
Re: Sell time Now I can understand why they say that Alliance Trust Savings will be making a profit, with annual charges going up to £120. I'm afraid I switched my ISA to Hargreaves Lansdown several months ago. Their charges of 0.45% for Investment Trusts, shares, bonds and ETFs are capped at a maximum of £45 per year and their service is good (there was also a cash incentive for switching!).
trader jack
20 Dec 2016
Re: Sell time Well, just managed to get the new charges to be applied after 1st February.ISA's and IDA account charges are increased by 33PERCENT to £10.00 per calendar month.Actual indiviual dealing charges charges (at least for me) have dropped 20.14 PERCENT.Now Alliance say yhat their new account charges include 4 online trades a year. Great. I usually offload a holding around the end of March to buy back into the new finacial year's ISA so I take that's 2 deals a year sorted. Many of the shares I own have their dividends re-invested so do I get 2 of those done free (cost of reinvestment stays the same at £5 per trade.) or do I specifically have to buy / sell a stock to fully participate.This and their letter regarding the Strategic Review (6 A4 sides) was not the required reading I had envisaged for Christmas. I was looking forward to the Private Eye Annual but Amazon still have not told me when they may have it in stock!Merry Christmas to all even the non ATST holders on this board.TJ
Tony Proudfoot
20 Dec 2016
Re: Sell time Not so sure...The Alliance share price is doing well. It looks as if Elliott have increased their holdings from around 87M shares in August to 92M shares now after the announcement of the strategic review by the new Board. What does that mean? Is it a ringing endorsement? Or are they still dissatisfied and wanting even more? They have board representatives now so they must have known what the outcome was going to be.I would be interested to know what people think but, frankly, there is sound case for sitting on one's hands rather than selling.
