The investment company’s head of IR explains how he approaches private and institutional investors differently
Evan Bruce-Gardyne, head of investor relations at Alliance Trust, an investment company in London’s FTSE 250 index, has insights into winning retail investors.
Alliance Trust, which has been investing since 1888, is one of the biggest generalist investment companies by market capitalization – £2.2 bn ($3.5 bn) – on the London Stock Exchange.
The company, which can use gearing and hedging to enhance returns and hedge risks, employs about 280 people in offices in Dundee, Edinburgh and London. 
What is your strategy for targeting retail investors, and how do you sustain demand?
That’s very close to our heart, given that 70 percent of our shares are beneficially held by private individuals, either on the main register or through discretionary fund managers and in ISA accounts, and it’s a percentage we’d like to see grow.
Our core shareholders are private investors, and we focus on discretionary fund managers who can introduce us to those individuals.
From an investment trust perspective, you only really have your performance to sell yourself on, and if the return or reputation isn’t there, we’re fighting a losing battle.
We need to deliver performance and, once we have delivered, we need to explain that as coherently and consistently as possible to our target audience. I think consistency is very important; no investor likes surprises.
Through times like these, we find the fact we’ve delivered an increased dividend for the last 45 years and the fact we’ve put our dividend up 7 percent this year has gone down very well.
What are the different nuances you must convey to your separate audiences of private or institutional investors?
Given that private investors want consistency, we emphasize the established policy of paying a progressive dividend. We have long-standing shareholders, and some of our institutional investors fall into that bracket.
With an investment trust, there are different things that different classes of investors will look for. A private investor is much more interested in what’s happened to the share price, the dividend and a low total expense ratio, whereas the institutional investor is much more interested in the relative performance and the movement in the discount.
If you are an institutional fund manager, you are being measured on relative performance, so we need to perform if we’re part of that portfolio. This means there is a different story and a slightly different pitch.
