Alliance Trust has struck a softer note on the prospective financial sector fall-out from Scottish independence by saying it would not lead to job losses in Dundee.
Karin Forseke, chairman of the £3.2bn investment company headquartered in the city, said it had a team of people working on the detail of the separate English subsidiaries that Alliance announced recently it would create in the event of a Yes vote.
But asked by a shareholder at yesterday's packed annual meeting in Dundee about any threat to jobs in the city, Ms Forseke said: "We do not see that as being an issue, our operation in Dundee will remain as is. This is about additional support in London."
Ms Forseke faced a series of questions on the referendum, several from English shareholders concerned about the safety of their money, one of whom said he was "uncomfortable about investing in a foreign country".
The chairman said 80% of the customers of Alliance Trust Savings were outside Scotland and they would be safeguarded by the setting up of new London-based entities. The company would continue to be regulated by the FCA "until such time as there is a new regulator in Scotland potentially", Ms Forseke said.
She stressed that ATS had finally returned to profit last year and was among the UK's top five platforms at a time of 20% annual growth for that sector. The group's other subsidiary Alliance Trust Investing had cut its losses from £6.2m to £4.1m while 80% of its fund range had achieved above average performance over 2013, and both businesses were "incredibly important to the future of the company", the chairman said.
Alliance Trust itself saw performance slip below the median in its global growth sector in the first quarter of 2014, according to Moneyfacts figures, and shareholders heard from remuneration committee non-executive Susan Noble that the company's two executive directors had failed to meet their bonus targets on the trust's performance last year. The chairman however stressed the trust's 32% total shareholder return over the past three years, putting Alliance ahead of its sector (25%) and its benchmark world index (24%), and the 47th consecutive rise in the dividend
Katherine Garrett-Cox, chief executive, was asked by shareholder Jonathan Robertson why the trust which is supposedly a long-term investor had turned over 50% of its portfolio last year. She said that had been largely due to the recent portfolio reconstruction, and this year's turnover was likely to be a more normal 40%.
Ms Garrett-Cox added: "At the same time markets have been moving quite fast over the last couple of years... from time to time we decide companies have reached the uppermost limit of valuation we are prepared to adopt."
Shareholders were also told the move to a "global, thematic and concentrated" portfolio explained why fund management costs had more than doubled since 2006 but the 0.75% cost was still competitive. Asked by veteran questioner John Cruickshank how Alliance Trust would regard Pfizer, one of its biggest holdings, taking over Astrazeneca with the loss of UK jobs, Ms Garrett-Cox said it believed in holding companies to account. She also said Alliance would be prepared to vote against remuneration reports, would avoid cluster munitions makers, and would invest "in such a way that does not compromise our traditional values".
Shareholder John Clare asked what ATS could do to encourage a new generation of investors with smaller holdings, who faced a disproportionate burden from the flat fee structure. Ms Forseke said ATS was "ahead of the curve" in its cost transparency.