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The stocks Ilario Di Bon is banking on to revive Alliance Trust
by Sarah Miloudi on Jul 23, 2012 at 07:48
Ilario Di Bon plans to lift Alliance Trust’s performance by halving the vehicle's 200 holdings and introducing key blue chip names like Visa and Roche.
Now, just over a year later, Di Bon has been appointed Alliance Trust’s head of equities, taking charge of the £2 billion investment company’s stock selection, reporting directly to chief executive and chief investment officer Katherine Garrett-Cox.
Under his stewardship, the vehicle’s new equity portfolio, which accounts for around 90% of assets, will become more concentrated and focused on blue chip companies that tap emerging global themes rather than regional allocations.
The new strategy will see Alliance Trust’s 200 or so holdings cut back to around 100, reflecting Di Bon’s decision to give it a higher conviction and unconstrained slant.
‘The idea is to focus the trust on an approach which is higher conviction and long-term in its nature, with fundamental stock picking being the real driver over time,’ he said. ‘Essentially, it’s a work in progress, but the number of holdings will halve from around 200 to less than 100. It’s not really top down [in approach], but we have big thematic trends then look for the stocks. We could be heavy on the US, but not because we are positive on the country, but because we have a number of companies there.'
Di Bon told Wealth Manager he expects to introduce credit card provider Visa and Swiss-founded global healthcare company Roche to the investment trust’s portfolio, two names that feature prominently in his £157.1 million GTO fund.
‘Visa plays into the broad e-commerce theme, penetration of payments and consumption in emerging markets,’ he said. ‘The angle with Roche we are really excited about is personalised medication, or the “new frontier”. Patients are treated on an individualised basis, with solutions tailored to their healthcare DNA.’
Both will be entirely new holdings for Alliance Trust.
Will it be enough?
Di Bon (pictured) acknowledges that the reconstruction of Alliance’s equity portfolio is still a work in progress, and comes after a challenging two years which have seen the trust come under fire. It has suffered two attacks from activist investor Laxey Partners because of its wide discount, as well as a call to outsource its management.
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