Scottish Investment Trust reviews management

Ally McKinnon, manager, Scottish Investment Trust

The board of The Scottish Investment Trust PLC (SIT) has announced that it will “undertake a review of the future investment management arrangements of the company.”

The closed-end fund said any proposals will be considered alongside its current management “which the board notes have delivered strong recent short-term performance.”

As of April 30, 2021, Edinburgh-based SIT managed assets of £677 million and had a stock market value of £519 million.

“In 2015 the company adopted a high conviction, global contrarian investment approach,” said SIT in a stock exchange statement on Wednesday.

“The board’s view was that a period of at least five years would be required to evaluate the company’s returns under this mandate. 

“The company does not have a formal benchmark but, by way of comparison, the company’s NAV (net asset value) total return has underperformed the sterling total return of the MSCI All Country World Index over the five years ended 30 April 2021.

“The board has therefore appointed Stanhope Consulting to assist it in the review of the company’s investment management arrangements.

“The board invites proposals from established fund management groups, with the experience of managing listed closed-ended funds, designed to deliver, over the longer term, above index returns through a diversified global portfolio of attractively valued companies with good earnings prospects and sustainable dividend growth.

“Any such proposals will be considered alongside the current management arrangements, which the board notes have delivered strong recent short-term performance.

“Interested parties are invited to contact Stanhope Consulting.

“There is no certainty that any changes will result from the review.

“The board will make further announcements in due course.”

SIT’s management team includes Alasdair McKinnon, Martin Robertson, Mark Dobbie, James Webb and Igor Malewicz. The chairman of the closed-end fund is James Will.

On December 14, 2020, The Scottish Investment Trust said it would increase its dividend for the 37th consecutive year despite its share price total return falling 12% and net asset value (NAV) total return falling 10.6% in the year to October 31, 2020.