Alliance Trust eyes ESG integration as SRI head Michaelis becomes head of equities

Venerable UK investment trust hands expanded role to SRI head

Alliance Trust Plc, the 128-year-old listed UK investment trust, has signalled that it will integrate environmental, social and governance (ESG) factors across its investments with the announcement that Peter Michaelis is to take over as its head of equities.

Michaelis is currently its Head of SRI who oversees the Sustainable Future funds range that Alliance Trust acquired from Aviva Investors for an initial £1m in 2012. He takes over from Ilario di Bon, who is leaving the company. Di Bon joined Alliance Trust as Head of Global Equities in July 2011; he was previously Head of Institutional Global Equities at Fidelity International.

Michaelis told RI there would now be a common research process across Alliance Trust’s range, with a strong emphasis on ESG integration. He said: “We’ve taken what we’ve learnt on the Sustainable Future funds and applying it to a mainstream trust.”

He will lead a single equity investment team reporting to CEO and chief investment officer, Katherine Garrett-Cox.
In a lecture last June, Garrett-Cox said shareholders in Alliance Trust have quizzed her about “wasting our time and effort” on sustainability at the expense of performance and profits. She countered this by saying:“It’s just that we see performance and profits as an outcome of these additional efforts.” Michaelis told RI that clients were “broadly supportive” of the move.

“It’s about long-term investment horizons – using sustainability as a tool,” he added. Despite the common approach, the investment mandates of the trust and the Sustainable Futures range – which was added to in July 2014 with the launch of its Defensive Managed and Cautious Managed offerings – remain the same. In addition, Simon Clements, who was head of global equities at Aviva Investors, will be responsible for managing Alliance Trust’s equity portfolio.

Garrett-Cox said the move would “allow us to promote an integrated and responsible investment strategy which we believe is a necessity, and no longer a choice, in today’s world”. Alliance Trust, founded in 1888, has been a signatory to the Principles for Responsible Investment (PRI) since 2011.

Speaking at the firm’s AGM in June, chair Karin Forseke, the former exchange and investment banking executive, said: “We talk about sustainability a lot within the company. It flows naturally from “Investing for Generations” and provides the core of our focus.” Announcement