Alliance Trust has entered into an investment advisory agreement for Aviva Investors’ £1.2bn sustainable and responsible investment range.
The deal, which is set to conclude on 31 August, will see the Aviva SRI team, which is headed by Peter Michaelis, move to Alliance Trust.
The team will continue to provide investment advice for the current SRI funds under an investment-advisory agreement. There will be no change to the investment objectives and process of the funds.
The authorised corporate director responsibilities for the seven Oeics will transfer to Alliance Trust early next year. Aviva is considering the future of its Luxembourg fund range and will contact investors once any plans are in place with the regulator.
In February, Money Marketing revealed Aviva’s plans to sell its SRI business as part of a move to reduce its retail presence. The firm announced plans to cut 160 jobs in January with its London-based European, emerging markets, global and SRI desks being affected.
Aviva Investors interim chief executive Paul Abberley says: “This is a good outcome for our clients and also our business. The transfer of our SRI team to Alliance Trust Investments will facilitate a seamless transition of responsibilities and ensure consistency is maintained in the investment process.
“In January this year, Aviva Investors decided to focus its business on areas of existing competitive strength, which includes fixed income, multi-asset solutions, real estate, and core equities. As a result, the decision was taken that a new institutional home should be found for our dedicated SRI capabilities.”
Alliance Trust managing director Ed Troughton says: “Securing this highly respected SRI team led by Peter Michaelis underlines our future growth strategy of focusing on global equities and fixed income with an emphasis on specialist investment opportunities. It is also further evidence that we are rapidly carving out a reputation as one of the UK’s leading specialist investment houses.
“The skill set of the SRI team perfectly complements our current approach in both global equities and fixed income. These three core parts of our business will now allow us to design tailored, specialist, investment solutions for our clients – both at the fund and segregated level. This announcement marks the next stage in our development and will help accelerate our path to profitability.”
The news comes as Alliance Trust announces its half-year results for 2012. The trust has made a total return of 5.5 per cent in the six months to 30 June, compared to a 5.3 per cent return in the Global Growth sector index. The trust is ranked 13/33 in the Global Growth peer group over six months.
Last month, Alliance Trust announced a restructure of the management of its equity portfolio, which will result in its four regional equity portfolios being merged into its existing global equity portfolio. The restructure will see Ilario Di Bon take on a new role as head of equities and will be supported by a global equity team. He will report directly to chief executive Katherine Garrett-Cox.