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Investment trust insider on Securities Trust of Scotland

Investment Trust Insider on Perpetual Income and Growth

Investment trust insider on Securities Trust of Scotland – James Carthew: Securities Trust swings in the balance

Securities Trust of Scotland (STS) has served protective notice on its manager, Martin Currie. The trigger for this was Mark Whitehead’s resignation from Martin Currie. He has managed the investment trust since May 2016, having joined Martin Currie the previous November from Sarasin & Partners.

STS joins a growing list of investment companies considering changing their fund managers. Temple Bar (TMPL) served notice on Ninety One UK in April after Alastair Mundy took an extended leave of absence from the firm formerly known as Investec Asset Management, and Perpetual Income & Growth (PLI) is considering its future after losing patience with Invesco and Mark Barnett.

STS currently has a market value of just £200m but it used to be much larger. It lost two thirds of its assets in 2005 when the board decided to offer shareholders a cash exit or a switch into Lowland (LWI) as an alternative to a takeover approach from PLI.

In 2011 after BP’s Deepwater Horizon disaster and its subsequent dividend suspension and cut, STS switched from a UK equity income mandate to a global equity one. This anticipated exactly the sort of problem that now faces UK equity income managers as a consequence of the over-concentration of dividend income in the UK market in just a few handfuls of stocks.

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