The board of the Witan Pacific trust announced today (July 22) it had conducted an “extensive review” of the company’s management arrangements and appointed Baillie Gifford as the company’s new manager.
Under Baillie Gifford’s management, the trust’s investment remit will change from Asia Pacific stocks to just Chinese companies. The portfolio will consist of 40 to 80 stocks, 20 per cent of which can be unlisted shares.
Susan Platts-Martin, chairman of the trust, said: “We are delighted that the company will be able to access Baillie Gifford's proven experience investing in China given its strong track record in this area.
“The board believes that the move to a China growth strategy will provide shareholders with a truly differentiated investment proposition that should lead to a tightening of the discount and growth of the company through superior investment returns.”
Baillie Gifford said China was “central to the future of the Asia Pacific region” and there was an “exciting opportunity” to reposition the company to focus solely on this important market.
It added there were only two investment trusts focused on China — Fidelity China Special Situations and JPMorgan China Growth & Income — while there were eight competitors in the Asia Pacific region.
Baillie Gifford said: “China’s growing competitiveness is being noticed. [We] believe that technology is at the heart of US-China tensions...and China has proved its ability to deliver world leading companies through investment, innovation and support.
“[The] dominance of old economy sectors such as construction and manufacturing is shifting to a lead in many new economy areas, such as e-commerce, online payments, renewable energy and healthcare.”
Sophie Earnshaw, investment manager in Baillie Gifford’s emerging markets equity team, and Roderick Snell, manager of the Baillie Gifford Pacific Fund, will manage the portfolio on a day-to-day basis.
Once approved by shareholders, expected at the end of August, the board will change the trust’s name to the Baillie Gifford China Growth trust.
Shareholders will be able to withdraw their investment, either in part or potentially in whole, if they wish to do so.
The board said Witan had been fully supportive and had assisted in the review of the management process.
In an announcement today, Witan said it was “pleased” with the outcome and that it had previously indicated its readiness to cease its executive services role at a time mutually agreed with the board.
Andrew Bell, chief executive of Witan, said: “Witan has valued its 15-year relationship with Witan Pacific, commends the board for its consistency in taking decisions which clearly prioritise the long-term interests’ of shareholders and wishes Witan Pacific well for the future.”
The trust has performed reasonably well over the past decade, returning 141 per cent compared to the AIC Sector average of 161 per cent.
Over the past year, it has beaten its peers’ average of 4.9 per cent to return 6.9 per cent.
imogen.tew@ft.com
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