Alliance reveals shift in bias of activities

City Editor

Wednesday 13 March 2013

DUNDEE-based Alliance Trust, run by chief executive Katherine Garrett-Cox, has revealed that half of its investment team is now based in London as its performance trailed that of its peer group in its latest year.

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The £3.2 billion trust posted a net asset value total return of 12.1% for 2012, against 12.4% for the average in the global growth sector, although it was ahead of the MSCI All-Country World Index at 11.7%.

Ms Garrett-Cox hailed a "strong investment performance" after a year in which the trust underwent a £1 million overhaul that saw one-third of fund managers leave. She also highlighted a strong showing in 2013. She said: "We have had the best start to any year for 20 years." Alliance Trust revealed half of its investment managers, of whom there are 24, are now based in London. Last year the company axed eight fund managers, several of whom were based in Scotland, and hired a six-strong London-based socially responsible investment team from Aviva.The remainder of its fund managers are split between Edinburgh and Dundee. Ms Garrett-Cox said: "In the past people have sometimes criticised us for being based in Dundee. We have been quite clear we want the right people, wherever they are."Stephen Peters, analyst at Charles Stanley, said a strong London presence would allow Alliance Trust managers more access to companies. "It has got to employ the best people it can afford," he said. "If it can afford people in London now that should be good for shareholders, including the large number in Scotland."The southwards shift in the bias of Alliance Trust's investment activities follows similar moves elsewhere. Aberdeen Asset Management has a 100-strong investment team in London compared to 30 in Scotland, and 500 in total around the globe.Meanwhile, a number of Ignis Asset Management's fund managers have moved from its Glasgow base to London in recent years. The bulk of Alliance Trust's workforce, some 193 people, is in Dundee with 20 in Edinburgh and 26 in London.Ms Garrett-Cox said: "Dundee remains incredibly important to us."Alliance Trust told investors Scottish independence might mean changes to financial services regulation but did not pass a view on the referendum in 2014.Asked if the company would consider moving from Dundee, Ms Garrett Cox said: "It is a little too early to make those kinds of decisions. We are proud of our Scottish heritage."The changes at Alliance Trust have led to its stock list being trimmed to 100 from 450 at its peak. Mr Peters said: "Katherine Garrett-Cox has brought Alliance Trust into the 21st century and she is hoping her fund managers are going to deliver the goods."Ms Garrett-Cox said the recent problems that have dogged financial markets had not disappeared. She added: "I do not think anybody would have forecast markets would have rallied so hard in three months. Our best guess is that the market pauses for breath."The trust announced a fourth interim dividend of 2.3175p to be paid on April 5 and a special dividend of 0.36p to be paid on July 1.This takes the total payout to 9.63p for the year, up 7% on 2011 and is its 46th consecutive annual dividend increase. It said next year it expects to recommend quarterly interim dividends of 2.3870p.

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Alliance reveals shift in bias of activities

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