Investec has slammed Witan’s (WTAN ) multi-manager approach after a disappointing 2023 means that the global equity investment trust underperformed in five of the last six years.

The £1.8bn trust slightly underperformed in 2023, with a net asset value return of 12.8% compared to the MSCI ACWI and MSCI UK IMI composite benchmark’s 14.7%

However, this is just the latest in a bad spell which has seen Andrew Bell (pictured below) and James Hart deliver underlying returns of 48% over five years, while the shares rose 39%, falling well short of the benchmark’s 70%.

Writing in a note, Investec analysts Alan Brierley and Ben Newell said the magnitude of underperformance was difficult to reconcile as the style offers investors exposure to a portfolio of 10 distinct but complementary philosophies that should mitigate investment risks.

The Investec pair flagged their corporate client Alliance Trust (ATT ), which has returned 86% since it incorporated the multi-manager style in 2017, versus Witan’s 50%.

‘Clearly [Witan’s] investment process is not working, and indeed we have previously highlighted a catalogue of poor investment decisions and our concerns over the slow response to the dynamic evolution of global equity markets,’ wrote Brierley and Newell.

Shareholders have not had too bad a run and the trust currently sits on a discount of 10%. However, this is in large part due to aggressive buybacks with the board buying more than 30% of its shares in the past five years. 

The analysts added the supply and imbalance is ‘deeply concerning’ when you take into account that a significant proportion of the register may have refrained from selling because they are effectively ‘tax-locked’. Brierley said this referred to long-term shareholders (the trust has been around since 1909) who are avoiding triggering what would be a significant capital gains tax. 

‘Ultimately though, serial buybacks are not the answer and there comes a time when a more creative solution is required,’ Brierley and Newell wrote.

The portfolio, which includes managers Lindsell Train and emerging market specialist GQG Partners, currently has a 40% weighting to North America, 22% to Europe and 17% to the UK, with investment company holdings constituting 11% of assets.

Bell and Hart, who declined to comment, manage 13% of the portfolio themselves. In December they purchased General Electric, the US power, aviation and healthcare giant and International Holding Company, an Abu Dhabi-based conglomerate. 

They reduced their exposure to Blackrock World Mining (BRWM ) and Princess Private Equity (PEY ).