Willis Towers Watson, the investment manager of Alliance Trust (ATST), has added the wonderfully named Vulcan Value Partners (VVP) to the global trust’s investment manager line-up.
In keeping with Alliance Trust’s strategy of combining the best ideas from the best stock pickers from around the world, the appointment takes the number of managers selected for the trust from eight to nine.
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Alabama-based Vulcan is a boutique equity manager with over $12bn of assets under management. It was established in 2007 by the seasoned investor C.T. Fitzpatrick, the firm’s chief investment officer who will be the lead portfolio manager for the Alliance Trust account. VVP recently reopened capacity for new investors, having been closed since 2015.
Craig Baker, chairman of the Alliance Trust investment committee and global chief investment officer of Willis Towers Watson, insists Vulcan’s appointment will provide ‘access to another highly skilled active manager and will enhance further the portfolio’s diversity and risk control’.
Baker adds: ‘What differentiates Vulcan from other “value” managers is the team’s focus on capital preservation and long-term compounding opportunities.’
Vulcan treks around the globe to find ‘a small number of very high-quality businesses that have 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’.
NEW LOOK ALLIANCE
One of the oldest and largest UK investment trusts, Alliance Trust is an Association of Investment Companies (AIC) ‘Dividend Hero’, boasting 52 consecutive years of rising dividends under its belt. The fund is also into its third year under a new strategy born out of pressure from activist investors.
Bid up 2p to 800p on today’s new manager news, new-look Alliance Trust is pitched as a one-stop-shop for global equities and blends the types of managers to mitigate risk; having a mixture of styles acts as a cushion when one of the styles is out of favour.
As at the end of August, the best ideas from the trust’s roster of stock pickers, shown in the table below, had generated a portfolio of almost 200 holdings.
Numis points out that while performance was strong in the 12 months following the fund adoption of a multi-manager structure under Willis Towers Watson in early 2017, relative performance has been slightly weaker in 2019 to date.
Turning to Vulcan, the broker says risk is defined by the manager as the probability of permanently losing capital over its five-year time horizon, rather than market volatility, which enables the manager to own the likes of Amazon, Facebook and Nvidia among its other strategies.
