Liontrust says the move is expected to increase its assets under management to more than £8 billion once the proposed acquisition is completed in 2017. Alliance Trust Investments is believed to have been for sale for some time.
The proposed acquisition is expected to increase Liontrust’s assets under management by around £2.3 billion to more than £8 billion by April 2017. As part of the deal Liontrust will gain an investment team focused on sustainable investment.
The acquistion cost will include £17m of new ordinary shares of 1 pence each in the capital of the company, up to £3m in cash dependent on the future level of AuM managed by the ATI Investment Team and up to £10 million for the net asset value of ATI.
The ATI Investment Team, headed by Peter Michaelis and responsible for 11 sustainable investment funds, will join Liontrust. ATI’s funds include nine equity and fixed income funds.
The ATI funds will continue to be managed according to the same investment process, says Liontrust, and the ATI team will look for well managed companies that have good business fundamentals and which it believes the market undervalues.
John Ions, chief executive of Liontrust, said: “We have been very impressed by Peter Michaelis and the team at ATI. The investment managers 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.
“The team brings with it a broad range of existing equity and fixed income funds and a long-term track record: Peter was at Aviva Investors, including as head of sustainable and responsible investment, for 11 years before moving to ATI in August 2012.
“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.”
Peter Michaelis said: “We have been attracted to Liontrust by the culture of the company and the environment the company provides for fund managers. We will continue to focus on running money according to our own investment process.”
Liontrust Asset Management was launched in 1995 and is a specialist fund management group with shares quoted on the London Stock Exchange. Liontrust manages £5.6 billion (as at 11 November 2016) in UK, European, Asian and Global equities and Multi-Asset.
Hargreaves Lansdown says that the move will mean Alliance Trust replacing its existing investment management team in favour of a multi-manager approach.
Richard Troue, head of Investment Analysis, Hargreaves Lansdown, said: "This is the latest in a raft of changes to Alliance Trust in recent years. On balance it is encouraging to see the board take further steps to improve performance, but it is a shame it has taken so long to get this far. As always, the proof of the pudding will be in the eating and the success of the strategic review will be measured by the trust’s performance in the coming years."
"Many of the proposals seem sensible, but there are other global investment trusts with long-track records, well established processes, and experienced fund managers at the helm, which are available to UK investors."