Alliance Trust and Witan merge to create £5 billion investment vehicle "Alliance Witan".

From Morningstar: 2024-06-26 06:39:00

Two of the UK’s most popular closed-ended investment vehicles, Alliance Trust (ATST) and Witan Investment Trust (WTAN), are merging to create a £5 billion multi-manager investment vehicle, named “Alliance Witan”.

Witan will merge into Alliance Trust, valued at £3.42 billion, under the agreement, with existing Witan shareholders receiving new Alliance Witan shares in exchange.

The newly merged trust will create a rival to F&C Investment Trust (FCIT), valued at £5.13 billion, and employ a multi-manager approach at lower fees.

Alliance Trust has beaten its benchmark, the MSCI ACWI, in the last financial year, currently trading at a -5.64% discount to NAV, while Witan, with a £1.64 billion market cap, trades at a -7.83% discount.

The trustees of Witan chose to combine with Alliance Trust rather than single-manager candidates, aiming to continue the multi-manager approach at lower fees and in a larger, more liquid vehicle.

Both Alliance Trust and Witan employ multi-manager strategies, with Willis Towers Watson and a panel of six investment managers, respectively. The combined trust will follow a 10-20 “best ideas” approach under Willis Towers Watson’s management.

Analysts view the merger as beneficial for shareholders due to the multi-manager strategies, expecting a larger, more liquid company, although more share price volatility could arise in the future.

Alliance Trust’s portfolio includes top holdings like Alphabet, Microsoft, and Amazon, while Witan’s top holdings consist of the GMO Climate Change fund and a Vanguard FTSE 250 ETF.

In an interview, outgoing Witan CEO Andrew Bell expressed concerns about proposed changes to the UK’s listing rules amid political pressure on the country’s public markets, urging caution to the Financial Conduct Authority.



Read more at Morningstar: Alliance Trust and Witan in £5 Billion Merger