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Five investment companies celebrate 130th anniversaries and two reach 110

4 February 2019

Merchants, Edinburgh, BMO Global Smaller Companies, British Empire & Law Debenture are 130 in 2019.

February marks the 130th birthday of three investment companies, Merchants, BMO Global Smaller Companies and British Empire. Reaching the same milestone this year are Edinburgh and Law Debenture which launched in March and December respectively.

2019 is also an anniversary year for FTSE 100 company Scottish Mortgage and £2.2 billion company Witan, both marking 110 years since their launch in 1909.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC) said: “Considering the increased focus on short-term returns, it’s reassuring to see five investment companies marking their 130th anniversaries and two more celebrating their 110th anniversaries this year. As an investor it’s comforting to know that an investment company may have been around for decades, or in many cases over a century, serving generations of investors through market ups and downs.

“The five investment companies that launched in 1889, the same year that the Eiffel Tower was opened and van Gogh painted his Starry Night, are still meeting investors’ needs today and that’s a considerable achievement. Our industry celebrated a major milestone last year – 150 years since the launch of the first investment company. Investment companies are the oldest form of collective investment and 23 have track records stretching back over 100 years.”

A 130-year history

Simon Gergel, Portfolio Manager of Merchants said: “It is a great privilege to be the fund manager of The Merchants Trust as it turns 130 years old. This remarkable achievement provides perspective in a world obsessed with short-term market movements, political and economic risks. Having survived through two world wars, the great depression, the global financial crisis and the 1970s inflationary shock, somehow today’s uncertainties over Brexit and Donald Trump’s trade spat with China don’t seem so threatening.”

Mark Barnett, Manager of Edinburgh Investment Trust said: “Over its 130-year history, the Edinburgh Investment Trust has stood witness to global conflicts and financial crises, the growth of globalisation and the rise of the world’s modern investment infrastructure. Over time, the trust has responded to these challenges and changes, evolving from the £450,000 bond and equity investment company established in 1889, to the £1.4 billion UK equity investment trust of today.”

Peter Ewins, Fund Manager of BMO Global Smaller Companies said: “BMO Global Smaller Companies started life as the Alliance Investment Company in 1889 with initial share capital of just £1 million. Originally the trust invested mainly in overseas government bonds like many of the early investment trusts, but in 1975 the board of the day decided to focus on smaller company equities. Given the strong performance of small caps in recent decades, this was an astute move and the market capitalisation of the company ended 2018 at some £737.2 million.”

Joe Bauernfreund, Investment Manager of British Empire said: “British Empire Trust was incorporated in London in 1889 as The Transvaal Mortgage, Loan and Finance Company Limited, with the aim of investing in the hot emerging market opportunity of the period – the Transvaal colony of southern Africa, a region rich in minerals and resources.

“That was 130 years ago and today – notwithstanding the newer, imperial name – the company has become a globally diversified investment trust with nearly £1 billion in assets. The trust has been managed by Asset Value Investors (AVI) since 1985 and follows a unique strategy of investing in ‘asset-backed companies’, including holding companies, closed-ended funds, property companies and, as of June 2017, cash-rich Japanese companies.”

Adapting to the world today

Simon Gergel, Portfolio Manager of Merchants said: “One of the great features of investment companies is the ability of the board to set strategy and to adapt to a changing world. Merchants was formed originally to finance the North American railway boom, and other opportunities elsewhere around the world, but it has evolved over the years. Whilst Merchants now invests solely in UK companies, it is notable that many British companies are multinational businesses, with the majority of Merchants’ portfolio’s underlying sales and profits still coming from abroad. Generating a high income has always been part of Merchants’ DNA, long before DNA was discovered, and we are proud to have been able to raise the ordinary dividend for the last 36 years. This makes Merchants one of the AIC’s dividend heroes, as well as being one of the highest yielding trusts in its sector.”

Mark Barnett, Manager of Edinburgh Investment Trust said: “As I reflect on the 130-year history of the Edinburgh Investment Trust, I am proud that the core principles of the strategy employed are unchanged and remain consistent with the company’s strong long-term core values. The macroeconomic environment remains challenging, but I remain convinced that in adhering to the principals of stock selection, active management and purchasing companies at attractive valuations, the trust can continue to meet the requirements of shareholders.”

Denis Jackson, Group Chief Executive of Law Debenture said: “Law Debenture has remained true to its guiding principle of value creation for its stakeholders since it was founded and listed on the London Stock Exchange 130 years ago. Its name, respected internationally, is synonymous with trust and quality. Over time, the independent professional services business has evolved to meet the ever-increasing needs of its global clients, while acting as a key value driver and supplementing the income from our diversified equity portfolio. Janus Henderson, throughout its history, has been trusted to manage our investment portfolio since 1974, when the group decided to divide into two distinct but complementary areas of business. The unique investment proposition delivers long-term capital growth and income to our shareholders.

“The strong, consistent income from the independent professional services business gives Janus Henderson greater flexibility in its investment selection, resulting in over 42 years of maintaining or growing the dividend. Over the past 10 years, Law Debenture has delivered a share price total return of 243.5%, a significant outperformance of the FTSE All-Share Index of 138.3%. Having joined Law Debenture as CEO last year, I am proud of its heritage. Together with my colleagues, I look forward to continuing to evolve the business and maintain our impressive track record of delivering value to all of our stakeholders.”

Peter Ewins, Fund Manager of BMO Global Smaller Companies said: “Over the period since 1975, the trust’s asset allocation has become progressively more internationally orientated, with the UK, which once represented the bulk of the assets, now only accounting for around one quarter of the overall trust. Our team looks for the best smaller company opportunities from around the world wherever they may be and we have also used third party funds to gain exposure to markets in Asia and Latin America for more than a decade. In the same way that the trust has a proud long-term record, we seek to focus our own investing around companies with demonstrable track records of their own and good growth potential, run by strong management teams.

“Being a closed-ended fund gives us the scope to build stakes in some of the least liquid stocks which an open-ended fund would be more reticent to do. This can be where valuation anomalies are most attractive.”

Joe Bauernfreund, Investment Manager of British Empire said: “The AVI approach focuses on benchmark-agnostic, bottom-up stock-picking, with an emphasis on finding companies with attractive assets trading on a discount to a conservative estimate of net asset value. The team also attempts to identify catalysts which may help to close the gap between the share price and the NAV. In many cases, AVI engages constructively with the management and boards of its holdings in order to provide expertise and suggestions on bringing in the discount.

“The strategy has stood the test of time through various market cycles and crises. AVI actively strives to generate value for the trust’s shareholders during bull and bear markets.”

Prospects ahead of Brexit

Mark Barnett, Manager of Edinburgh Investment Trust said: “Domestically orientated companies remain undervalued relative to the broader market, and trade at multi-year lows. The market is discounting a sharp deterioration in profits and a slowdown in the UK economy, both of which are overly pessimistic in my view. Against this backdrop the trust has been positioned towards more domestically orientated stocks, where, to my mind, the most compelling opportunities lie.

“In the coming weeks we stand to achieve clarity on the outcome of Brexit. Given the significant negativity already priced into sterling and UK domestic facing companies, it is likely that any good, or better-than-expected news may be rewarded. The avoidance of a ‘no deal’ could prove the catalyst for a re-assessment of the UK’s prospects.”

The global outlook

Peter Ewins, Fund Manager of BMO Global Smaller Companies said: “The near term outlook for markets is always difficult to call and this is certainly the case at present given all the well rehearsed geopolitical uncertainties which have weighed on sentiment. We are cautious on near term earnings trends given the recent globally synchronised weakening of macroeconomic data, but valuations now look less stretched for many stocks provided the global economy performs broadly as expected in the coming period.

“We presently have an overweight stance to Japan and Europe, while we are underweight in the UK as the political scene remains uncertain.”

The 23 investment companies with 100+ year track records


AIC sector


Age at end 2019

F&C Investment Trust


Mar - 1868


Dunedin Income Growth

UK Equity Income

Feb - 1873


Scottish American

Global Equity Income

Mar - 1873


JPMorgan American

North America

Jun - 1881



UK All Companies

Dec - 1884


Henderson Smaller Companies

UK Smaller Companies

Dec - 1887


JPMorgan Global Growth & Income

Global Equity Income

Apr - 1887


Scottish Investment Trust


Jul - 1887




Apr - 1888


Alliance Trust


Apr - 1888


Edinburgh Investment Trust

UK Equity Income

Mar - 1889


Law Debenture Corporation


Dec - 1889


BMO Global Smaller Companies


Feb - 1889



UK Equity Income

Feb - 1889


British Empire


Feb - 1889


City of London

UK Equity Income

Sep - 1891


Aberdeen Diversified Income & Growth

Flexible Investment

Jan - 1898


TR Property

Property Securities

May - 1905


Murray International

Global Equity Income

Dec - 1907


Witan Pacific

Asia Pacific - Including Japan

Jan - 1907


Scottish Mortgage


Mar - 1909




Feb - 1909


Hansa Trust

Flexible Investment

Dec - 1912


Source: AIC


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  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 354 members and the industry has total assets of approximately £178 billion.
  2. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.
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