Alliance Trust Investments sold to Liontrust

Alliance Trust plc have announced that their investment management arm, Alliance Trust Investments, is to be sold to specialist investment managers LionTrust.

Alliance Trust plc have announced that their investment management arm, Alliance Trust Investments (ATI), is to be sold (in April 2017, pending approval) to specialist investment managers LionTrust. In their statement today, the team at ATI say “We are excited to announce that Alliance Trust Investments is to be acquired by Liontrust Asset Management Plc (Liontrust). As you most likely know, Liontrust is a successful independent fund management house with a strong reputation for performance and excellent client relationships.”

This is a major announcement for investors in the ethical & sustainable sector. Whilst initial indications are positive, it will potentially affect clients in many of the investment solutions we use at Ethical Futures; both directly invested in ATI funds and those who have investments via discretionary services and pensions.

The sale comes as part of a wider strategic review of activities at Alliance Trust following the departure of their CEO Katherine Garrett-Cox, after extensive shareholder pressure. The loss of Cox, a strong advocate of sustainable investment and the person responsible for bring the Sustainable Futures team to ATI, was always a worry to us and this fear now seems to be borne out. Further changes, including outsourcing of management of funds in their flagship Alliance Trust plc investment trust, also indicate a worrying reduction in investment management resource in Scotland and reinforce the somewhat antiquated image of Alliance Trust.

The positive news to take from these changes is that Liontrust see a strong future for sustainable investment and have agreed to take on the full investment team led by Peter Michaelis.  

John Ions, Chief Executive of Liontrust, said: "We have been very impressed by Peter Michaelis and the team at ATI. They will be an excellent addition to our seven teams as they are very experienced, have a clear and robust investment process and have shown that sustainable investment can provide strong investment returns as well as meeting investors' values.

"There is strong demand for sustainable investment in the UK and internationally. Increasingly, consumers expect the companies they use to be socially responsible and the demand for sustainable investment will only grow with the rise of millennials. The acquisition of ATI puts us in a very strong position to meet this demand and we look forward to promoting the team and their funds in the UK and across continental Europe."   

So what does this mean for investors? 

Over the short term, nothing will change as funds will be continue to be managed by the ATI team until the sale is approved by shareholders. On transfer there will be a ‘rebadging’ of the nine ATI funds. It remains to be seen whether they will all stay intact or if some ‘rationalisation’, of what is currently the widest range of screened funds in the UK market, will be undertaken. As the same management team are moving, this will bring continuity, so discretionary managers are less likely to sell because of change of ownership.

One area that has yet to be clarified however, is the fate of the ‘Aviva’ delegated authority. Originally these funds were run by Morley, the investment arm of Aviva plc. When they rationalised investment management, the funds and managers moved to ATI but crucially. they also retained the delegated authority for managing the Sustainable Futures funds under Aviva Life and pensions products. Your author has a vested interest in these pension funds – so rest assured we shall be keeping a watching brief on developments.

For further inflation see the following links


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