Two of Britain’s oldest investment trusts have revealed plans to merge in a deal that will create a £5billion funds giant.
The deal brings together Alliance Trust, which dates back to 1888, and Witan, which was founded in 1909.
The firms said after they join forces later this year, they will likely be eligible for admission to the FTSE 100 index of Britain’s biggest listed companies.
Merger: Alliance Trust and Witan, which each date back more than a century, said they were likely to be eligible for admission to the FTSE 100 after they join 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 tie-ups were on the way.
Witan chairman Andrew Ross said: ‘The companies share similar cultures. The deal will result in one of the leading investment companies in London and will stand our shareholders in good stead for many years to come.’
Laith Khalaf, head of investment analysis at AJ Bell, said: ‘This is a blockbuster merger of two of the biggest and oldest names in the investment trust world.
The deal will result in lower annual charges for investors, as well as preserving the long dividend track records of both trusts.’
Other recent deals in the sector include a tie-up between Fidelity and Abrdn’s China trusts.
Liontrust chief executive John Ions said the industry was ‘over-supplied with funds’, with 550 just in the global equity sector.
He added: ‘I would see more consolidation taking place. Putting together those two large investment trusts will deliver more economies of scale to reduce costs for the investor.’
Shares in Alliance Trust yesterday climbed 0.5 per cent, or 6p, to 1210p, while Witan rose 2.5 per cent, or 6.5p, to 267.5p.
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