BRITISH ASSETS TRUST: After 116 years of steady play, the trust is set for huge changes, The New Year could herald a big change for investors in British Assets, an investment trust that has been quietly plying its trade for the past 116 years.
If the trust's board, led by chairwoman Lynn Ruddick, gets its way in a shareholder vote in February the fund will undergo something of a revolution.
Out will go incumbent investment manager F&C and trust manager Phil Doel. As they exit stage left, in will come BlackRock Fund Managers and Adam Ryan, head of its 'diversified strategies' team.
The change is being proposed by the board to make the trust more appealing to private investors. In particular, it has an eye on the pension changes coming into effect in April, which remove the need for people to take retirement income in the form of an annuity.
The board believes a refreshed, income-friendly British Assets could benefit from the reforms as retirees look for income alternatives to pension annuities.
So, if Ruddick gets her way, the fund's emphasis will be on stabilising, then growing dividend payments to investors in line with inflation. Capital preservation – in real terms – will also be a goal.
This change in direction will result in the trust becoming less equity focused. Currently, more than 60 per cent of the portfolio is made up of UK shares with the bulk of the remainder invested in international companies. Under BlackRock, UK exposure will reduce to 40 per cent with the balance in a mix of other assets.
A change of investment management company for an investment trust is rare, though F&C lost another mandate earlier in the year, when Jupiter was appointed to run its US Smaller Companies fund.
This year, according to statistics compiled by the Association of Investment Companies, only seven investment trusts have appointed new managers.
Shareholders in British Assets will get their voting forms later next month ahead of the annual general meeting in late February, when the results of the vote will be made known.
AXA Investment Managers, a big shareholder, has already said that it backs the board’s change of direction.
Ruddick was head of investment trusts at Merrill Lynch Investment Managers, a UK funds house that merged with BlackRock in 2006.
She is on the board of investment trust BlackRock Frontiers, too.
