By Ian McConnell

Business Editor

THE £677 million Scottish Investment Trust, a self-managed fund formed in 1887, has invited proposals from external asset managers following a five-year period in which it has underperformed a key global equities index.

The Edinburgh-based trust said these proposals would be considered alongside current arrangements.

Announcing the board’s review of investment management arrangements in a statement to the stock market yesterday, SIT said Stanhope Consulting had been appointed to assist in this process. It added there was “no certainty” any changes would result, with the board noting “strong recent short-term performance”.

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The trust, of which Alasdair McKinnon is lead manager, noted it had adopted a “high conviction, global contrarian investment approach” in 2015.

It said: “The board’s view was that a period of at least five years would be required to evaluate the company’s returns under this mandate. The company does not have a formal benchmark but, by way of comparison, the company’s NAV (net asset value) total return has underperformed the sterling total return of the MSCI All Country World Index over the five years ended April 30, 2021.”

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SIT added: “The board has therefore appointed Stanhope Consulting to assist it in the review of the company’s investment management arrangements. The board invites proposals from established fund management groups, with the experience of managing listed closed-ended funds, designed to deliver, over the longer term, above-index returns through a diversified global portfolio of attractively valued companies with good earnings prospects and sustainable dividend growth. Any such proposals will be considered alongside the current management arrangements, which the board notes have delivered strong recent short-term performance.”

The trust declared that “interested parties are invited to contact Stanhope Consulting”.