Alliance and Witan join forces to form new £5 billion investment giant

Two of Britain’s oldest investment funds have unveiled plans to merge in a deal that will create a £5bn fund giant.

The deal brings together Alliance Trust, which dates back to 1888, and Witan, which was founded in 1909.

The companies said that after they join forces later this year, they are likely to be eligible for inclusion in the FTSE 100 index of Britain’s largest listed companies.

The merger is just the latest round of consolidation in the fund management industry and came after the boss of rival asset manager Liontrust predicted more ties were on the way.

Witan chairman Andrew Ross said: “The companies share similar cultures. The deal will create one of London’s leading investment companies and will serve our shareholders well for many years to come.”

Laith Khalaf, head of investment analysis at AJ Bell, said: ‘This is a successful merger of two of the biggest and oldest names in the investment fund world.

The deal will result in lower annual costs for investors and will maintain the long dividend track records of both trusts.”

Other recent deals in the sector include a partnership between Fidelity and Abrdn’s Chinese trusts.

Liontrust chief executive John Ions said the sector had an “oversupply of funds”, with 550 in the global equities sector alone.

He added: “I would see more consolidation happening. Bringing together these two major investment funds will create greater economies of scale and reduce costs for the investor.’

Shares in Alliance Trust rose 0.5 per cent, or 6p, to 1210p yesterday, while Witan rose 2.5 per cent, or 6.5p, to 267.5p.