Brunner management change

[barchid]

Very sad to see today's RNS saying Lucy Macdonald is stepping down from Brunner. She has transformed this trust, in shrinking discount from 20% 5 or 6 years ago to a few % today, geographic spread of investments and following a digitisation theme, not to mention refinancing crippling expensive debt.
It all appears to have happened rather suddenly, I read the RNS as suggesting that we will now have management by committee, not my ideal style of decision making.

[88V8]

This is what bothers me about Trusts as opposed to joint-stock companies - the apparent dependence on one individual's skills.
Does make me reluctant to put too much into ITs.
I don't want to have to spend my time reading RNS and worrying about who may be taking over the helm.

V8

[Dod101]

A bit like a football club, a trust is usually bigger than the manager. In fact trusts that put depend entirely on the skills of one manager are usually more dangerous than those that do not, but it is up to the Board to find another manager with similar skills if that is what they want. Unlike OEICs for instance, an IT has a manager but also a Board of Directors to provide the checks and balances.

And it is not usually just an individual there is usually an investment company behind the individual manager to provide the back up. I know nothing of Brunner and its manager but I expect that will apply there as well.#

Dod

[barchid]

Dod
I get your point about managers but I prefer, personally, a capable manager rather than management by committee, which is what we appear to be looking forward to here.
It looks like a palace coup with a successful manager replaced by a team in Germany, OK I am aware Allianz is german but her "successor "is the previous UK sector manager when less than 20% of assets are now held in UK stocks.
Macdonald successfully transformed the trust, hence the sharp drop in premium, from a stodgy generalist to global growth, I trust the committee management will succeed but I have severe doubts, look at Invesco for an example of committee management.

[Dod101]

Dod
I get your point about managers but I prefer, personally, a capable manager rather than management by committee, which is what we appear to be looking forward to here.
It looks like a palace coup with a successful manager replaced by a team in Germany, OK I am aware Allianz is german but her "successor "is the previous UK sector manager when less than 20% of assets are now held in UK stocks.
Macdonald successfully transformed the trust, hence the sharp drop in premium, from a stodgy generalist to global growth, I trust the committee management will succeed but I have severe doubts, look at Invesco for an example of committee management.

I wonder what Lucy did or did not do for her to be deposed by Allianz? But the management contract is with Allianz and I cannot see them changing an apparently successful manager without replacing her with an equally successful one. As for its being a team well, despite one person often being nominated, there is usually a 'house' style and that is unlikely to be changed with the change of manager. That is my experience anyway.

I hope all works out well.

Dod

[StOmer]

Surprising news. We were with Brunner for many years back before it was solely managed by Lucy MacDonald. Previously it was two managers with the UK being run by a guy and MacDonald holding the International portfolio. As mentioned above, it was a poor performer and UK heavy back then and although the discount reduced after the changes, it remained on a wide discount for the Sector. Aviva held a large stake in this one and Witan, they sold off the Witan holding and that incident saw a 7% fall in the NAV of Witan. I thought the discount remained stubborn around -9% due to the thought Brunner would suffer the same fate if Aviva sold out.

We sold out of Brunner earlier this year when we cut back holdings on news from the Far East of Covid-19. Still, sad to read this news as I thought MacDonald was doing a decent job for a generalist trust and we may have bought back in as we re-enter the market.

[Villa]

It has underperformed the FTSE Developed World Ex UK Index over 3,5 and 10 years.

Pretty shoddy.

[barchid]

Villa
I am unsure why you would compare it to an index which excludes the UK as 5 years ago Brunner had 50% UK exposure until LM reduced the UK to 30% over 2 years ago and it is now under 20%.
Against the Morgan Stanley index which is its benchmark,has Brunner either equalling or exceeding it over the past 3 years, on nav, and as the discount has reduced from 20% 4 or 5 years ago to somewhere between 4% & 8% these days it means that the shareholders have had a far from shoddy experience since LM took over its running.

[ADrunkenMarcus]

I wonder what Lucy did or did not do for her to be deposed by Allianz? But the management contract is with Allianz and I cannot see them changing an apparently successful manager without replacing her with an equally successful one.

I once worked in an organisation where they fiddled with anything that was working well and replaced it with something worse. Many people mistake activity for achievement! I hope that is not the case here.

Best wishes

Mark.

[richfool]

Brunner seems to be doing well since Lucy left, and since Aviva sold out:

Brunner offers value and global growth after Aviva exit

The double-digit discount on perennial bargain Brunner is narrowing as investors wake up to improved prospects for the £415m global investment trust freed from a long period of uncertainty.

The double-digit discount on perennial bargain Brunner (BUT) is narrowing as investors wake up to improved prospects for the £415m investment trust whose ‘growth at a reasonable price’ strategy looks suited to current stock market conditions.

Last month reluctant shareholder Aviva finally sold the last part of a 20% stake it inherited in Brunner when buying rival insurer Friends Life six years ago.
The discount – or gap between the share price and their underlying net asset value – widened to 18% in the pandemic crash in March last year. Although the rating began to improve as markets recovered, investor sentiment was knocked again when last May the trust’s respected lead fund manager Lucy Macdonald left in a reorganisation at Allianz Global Investors.

One year on, however, and investors are looking more kindly on Brunner. Macdonald’s former deputy Matthew Tillett (pictured below), who took over when Macdonald left, has stamped his mark on the £456m portfolio, helped by deputies Christian Schneider and Marcus Morris-Eyton.

https://citywire.co.uk/wealth-manager/n ... t/a1510226

[richfool]

Yet another change of lead manager at Brunner.

AllianzGI seeks new Brunner star as AAA-rated Tillett quits
26 July 2022
Update: Citywire AAA-rated fund manager Matthew Tillett is leaving Allianz Global Investors, prompting a second reshuffle in two years at Brunner investment trust, and promotion for his deputy on the Allianz UK Listed Opportunities fund.

Update: Citywire AAA-rated fund manager Matthew Tillett (pictured) is leaving Allianz Global Investors, prompting a second reshuffle in two years at Brunner (BUT ) investment trust.

Christian Schneider, deputy chief investment officer (CIO) for global growth, will become interim lead manager of the £438m trust for at least six months as AllianzGI looks to hire another senior fund manager to replace Tillett.

He will be supported by Marcus Morris-Eyton and Simon Gergel, CIO of UK equities and manager of Merchants (MRCH ) trust.

Schneider and Morris-Eyton had worked with Tillett since 2020 when he was promoted to run Brunner after the departure of Lucy Macdonald following a merger of AllianzGI’s global and European investment teams.

Tillett, who joined AllianzGI in 2006, earned his spurs on the £267m Allianz UK Listed Opportunities fund, which he ran from 2013, earning a top Citywire performance rating earlier this year.

Richard Knight, deputy manager of the open-ended fund for the past two years, is promoted to its lead manager.

A spokeswoman for AllianzGI said there would be no changes to the investment process on either fund or trust.

She said Tillett’s departure was unrelated to AllianzGI’s transfer of $101bn of US funds and assets to Voya Investment Management in New York, in which the group has taken a 24% stake.

AllianzGI was forced into the corporate reorganisation after US regulators fined the German group $1bn and ordered it to repay $5bn to investors in ‘Structured Alpha’ strategies that failed to protect them from losses in the 2020 pandemic crash.

However, it comes at a time of another significant change in the fund manager lineup with a new team running the popular £950m Allianz Technology Trust (ATT ) after the retirement of its longstanding fund manager Walter Price this month.

At yesterday’s close Brunner shares stood nearly 10% below net asset value, in line with their one-year average discount. According to its fact sheet, over three years to 31 May the shares generated a total return, including quarterly dividends, of 39.1%. This was less than the 42.2% investment growth in the portfolio but ahead of its benchmark (a composite of 70% FTSE World ex-UK and 30% FTSE All-Share), which grew 37.2%.

Brunner chair Carolan Dobson thanked Tillett for his ‘steadfast and valuable contribution over his many years of working with the company’.

She said Brunner continued to withstand the turbulent market conditions due to its focus on quality growth companies bought at a reasonable price. ‘Performance is good in these conditions and Brunner’s total return NAV outperformed the total return benchmark by 0.8% in the first half of the current financial year.’

Dobson said the 2.1%-yielder was on track to deliver its 51st year of rising dividends, with ‘strong’ revenue reserves supporting a 6.7% uplift in this year’s payouts.

https://www.theaic.co.uk/aic/news/cityw ... lett-quits

That is a shame and somewhat unsettling, after the relatively recent previous change when Lucy McDonald left. I've been building up a reasonable sized holding in Brunner, as my main global growth IT holding.

[Dod101]

I am not trying to be clever but if you want the opposite of Brunner think of Alliance with its multi investment manager approach. Not bad results either. I think a bit over 50% return in 5 years.

Dod

[richfool]

I am not trying to be clever but if you want the opposite of Brunner think of Alliance with its multi investment manager approach. Not bad results either. I think a bit over 50% return in 5 years.

Dod

Far from wanting the opposite of Brunner, I have been thinking of something similar or complementary to it, with a wider investment mandate. I had been thinking of FCIT., which has a multi-manager approach. Though I'm currently waiting to see what the Fed does this week and the big technology coy results due this week, to see what the market then does, and whether that might provide a lower entry point. I currently hold Mid Wynd.

Brunner remains a hold for me. I like (as with FCIT) that one receives a modest dividend from it and thus isn't totally dependent on growth alone.

[Dod101]

I am not trying to be clever but if you want the opposite of Brunner think of Alliance with its multi investment manager approach. Not bad results either. I think a bit over 50% return in 5 years.

Dod

Far from wanting the opposite of Brunner, I have been thinking of something similar or complementary to it, with a wider investment mandate. I had been thinking of FCIT., which has a multi-manager approach. Though I'm currently waiting to see what the Fed does this week and the big technology coy results due this week, to see what the market then does, and whether that might provide a lower entry point. I currently hold Mid Wynd.

Brunner remains a hold for me. I like (as with FCIT) that one receives a modest dividend from it and thus isn't totally dependent on growth alone.

When I said the opposite of Bruner, I meant getting away from the single manager remit which you seemed unhappy about. Alliance is certainly complimentary to it. It too has a modest dividend.

Dod

[richfool]

I am not trying to be clever but if you want the opposite of Brunner think of Alliance with its multi investment manager approach. Not bad results either. I think a bit over 50% return in 5 years.

Dod

Far from wanting the opposite of Brunner, I have been thinking of something similar or complementary to it, with a wider investment mandate. I had been thinking of FCIT., which has a multi-manager approach. Though I'm currently waiting to see what the Fed does this week and the big technology coy results due this week, to see what the market then does, and whether that might provide a lower entry point. I currently hold Mid Wynd.

Brunner remains a hold for me. I like (as with FCIT) that one receives a modest dividend from it and thus isn't totally dependent on growth alone.

When I said the opposite of Bruner, I meant getting away from the single manager remit which you seemed unhappy about. Alliance is certainly complimentary to it. It too has a modest dividend.

Dod

Point taken re multi-manager approach. Don't get me wrong, I do quite like Alliance, - in that I particularly like its holdings, and it pays a dividend of just over 2%, but when I compare its capital performance with its peers and specifically against: FCIT, Brunner, and Mid Wynd, it comes up short (and the extra 0.25% dividend isn't going to make up the difference).