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Two of Britain’s oldest investment funds have revealed plans to merge in a deal that will create a £5bn fund giant.
The agreement brings together Alliance Trust, which dates back to 1888, and Witan, founded in 1909.
The companies said that after joining forces later this year, they will likely be eligible for admission to the FTSE 100 index of Britain’s largest listed companies.
Merger: Alliance Trust and Witan, which each date back more than a century, said they would likely be eligible for admission to the FTSE 100 after joining forces later this year.
The merger is just the latest round of consolidation in the fund management sector and came as the boss of rival asset manager Liontrust predicted more mergers were on the way.
Witan Chairman Andrew Ross said: ‘The companies share similar cultures. The deal will result in one of London’s leading investment companies and will serve our shareholders well for many years to come.’
Laith Khalaf, head of investment analysis at AJ Bell, said: “This is a successful merger of two of the biggest and oldest names in the world of investment trusts.
The deal will result in lower annual charges for investors, as well as preserving the long dividend history of both trusts.’
Other recent deals in the sector include an alliance between Fidelity and Chinese Abrdn trusts.
Liontrust chief executive John Ions said the industry was “overfunded”, with 550 in the global equity sector alone.
He added: ‘I would see further consolidation taking place. The union of these two large investment trusts will generate more economies of scale to reduce costs for the investor.”
Alliance Trust shares rose 0.5 per cent, or 6p, to 1,210p yesterday, while Witan rose 2.5 per cent, or 6.5p, to 267.5p.
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