Alliance Witan PLC: A Year of Transformation and Growth

FTSE 100 Arrival and Historic Combination

2024 marked a pivotal year for Alliance Witan PLC, culminating in its promotion to the FTSE 100 following a historic merger with Witan Investment Trust Plc. This transformative combination unlocked significant economies of scale and enhanced share liquidity, positioning the company for continued success.

Strong Performance Amidst Market Challenges

Despite a complex market backdrop, Alliance Witan delivered a commendable Share Price Total Return of 14.3%, with the share price reaching £12.44 as of December 31, 2024. While the Net Asset Value Total Return of 13.3% trailed the MSCI All Country World Index benchmark (19.6%), the company's longer-term performance remains competitive.

This positive momentum is further underscored by a narrowing average discount to NAV of 4.7%, compared to 5.4% in 2023, outperforming the Association of Investment Companies' Global Sector average discount of 7.9%.

Dean Buckley, Chair of Alliance Witan, remarked, “The Company delivered strong outright gains for shareholders in 2024, although in common with most active global equity strategies, we underperformed our benchmark... Even so, the Company’s longer-term performance remains competitive.”

Dividend Growth and Shareholder Value

Maintaining its commitment to shareholder value, Alliance Witan announced a fourth interim dividend of 6.73p per share, bringing the total dividend for 2024 to 26.70p per share. This represents a 6% increase over the previous year and marks an impressive 58th consecutive annual increase, solidifying the company's status as an AIC Dividend Hero.

Mr. Buckley further commented on the company's success: “We also increased our dividend for the 58th consecutive year… With solid performance and a refreshed brand, the Board is confident that the Company is well placed to continue delivering attractive returns for shareholders.”

Investment Strategy and Market Outlook

Alliance Witan's multi-manager approach, blending the expertise of world-class active managers, aims to deliver long-term inflation-beating returns through a combination of capital growth and rising dividends. The company's global equity portfolio spans diverse sectors and industries, mitigating risk while aiming for market outperformance.

Looking ahead, the company acknowledges market uncertainties stemming from geopolitical tensions and evolving economic policies. However, with a diversified portfolio and a focus on strong fundamentals, Alliance Witan remains confident in its ability to generate long-term value for shareholders.

Navigating a Concentrated Market

The Investment Manager's report highlights the challenges posed by a market heavily concentrated in US mega-cap technology stocks. While acknowledging the underperformance relative to the benchmark in 2024, the report emphasizes the risks associated with passive strategies overly reliant on these giants.

The report also showcases a range of "hidden gems" within the portfolio - underappreciated companies with strong fundamentals and significant growth potential, illustrating the strength and diversity of the multi-manager approach.

Commitment to Responsible Investment

Alliance Witan is committed to incorporating Environmental, Social, and Governance (ESG) factors into its investment process. The company is actively working towards its Net Zero emissions goal by 2050, engaging with portfolio companies on climate-related issues and advocating for responsible business practices.