The deal will boost Liontrust’s assets by around £2.3 billion to £8 billion and see the ATI fund management team, headed by Peter Michaelis, transfer to Liontrust, according to a stock exchange announcement from the latter.
Liontrust said in its announcement that the deal broadens its distribution opportunities and will expand its client base further in the UK and internationally.
On completion 11 sustainable investment funds managed by ATI will transfer to Liontrust. The deal is expected to complete in April 2017.
John Ions, chief executive of Liontrust, said: “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.”
Alliance Trust Investments is the fund management subsidiary of a broader group with a history that dates back to 1873. The deal to sell the investments arm looks set to mark an end to Dundee-based Alliance Trust’s status as a self-managed investment company.
The future of the trust was set out in a December 15 statement after a strategic review that began in May 2016. Rather than rely on one manager, currently Alliance Trust Investments, the investment trust will adopt a multi-manager model, with Willis Towers Watson to be the “overall” investment manager.
Alliance Trust said it plans to remain a global equity investment trust, with about eight of the world’s top equity managers — as rated by Willis Towers Watson — to create and run their individual portfolios of about 20 stocks each.
Alliance Trust will now look to outperform the MSCI All Country World Index by 2% per annum, net over costs over rolling three-year periods, up from 1.0% before.
The outcome of the strategic review comes after a bruising battle with activist hedge fund Elliott Advisors, which resulted in a series of board changes – including the departure of former chief executive Katherine Garrett-Cox. Brief takeover interest from Jacob Rothschild’s RIT Capital dissolved in June.