Witan Pacific Investment Trust

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  • 08 mins 24 secs
Susan Platts-Martin, Chief, Witan Pacific Investment Trust, discusses the strategy behind the fund, the advantages of investing in Asia Pacific, why this strategy is unique and why investors should choose to consider Witan Pacific.


Witan Investment Trust

Witan Investment Trust plc
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PRESENTER: With an introduction to the Witan Pacific Investment Trust, I'm joined now by its chair, Susan Platts-Martin. Susan, what's the strategy on Witan Pacific? What makes it relevant?

SUSAN PLATTS-MARTIN: Hi, Mark. The strategy for Witan Pacific is to invest in the Asia Pacific region, including Japan. And Witan Pacific, although it's been going since 1907, it's really focused on the Asia Pacific region, particularly in the last twenty years. It adopts a multi-manager approach, and it has an active management style, which means it's aiming to outperform a benchmark index, rather than replicate it.

PRESENTER: So what are the advantages of the investment trust structure, when it comes to investing in Asia Pacific?

SUSAN PLATTS-MARTIN: Well, the Asia Pacific region, whilst it has a wide range of opportunities, can be quite volatile. And the investments trust structure, by virtue of its fixed share capital, gives the portfolio managers fixed pools of assets, which means that they can invest for the long-term, without worrying about cash flows in and out from investors buying and selling into Witan Pacific. So they could ride out the volatility in the region by taking a long-term view. And in addition, they can also invest in smaller companies, and take a long-term view, so the smaller companies being a less liquid part of the stock market.

PRESENTER: Can you outline what active multi-management is, exactly?

SUSAN PLATTS-MARTIN: I'll have a go. So Witan Pacific employees, four currently -- four managers -- so each portfolio manager has a slice of the portfolio. They each invest across the whole region. The active element means that they're trying to outperform the benchmark, rather than replicate the benchmark.

PRESENTER: Most investment trusts have got one fund manager. Why have you got four?

SUSAN PLATTS-MARTIN: Well, the reason we've got more than one and we've adopted a multi-manager approach is, firstly, that the Asia Pacific region could be perceived to be potentially more volatile than other reasons. By having more than one manager, all following the same benchmark, and we've selected those that we feel are the best managers for the area, we hope they'll all outperform the benchmark. But they have different styles and different approaches. So our expectation is that the peaks and troughs will be ironed out, and that if one particular manager is not performing at their best, that'll be made up for by the other managers.

PRESENTER: And what role does the board of the trust play in overseeing the portfolio?

SUSAN PLATTS-MARTIN: So the board are responsible for manager selection, for monitoring those managers, and for the due diligence associated with that. First of all, when we're picking managers -- and the line-up has changed twice since the multi-manager approach was first brought in in 2005 -- the board will employ an expert consultant to identify portfolio managers covering that region from around the world. Then the role of the board is to identify the two, three, four managers that we feel will work best for our shareholders, and work well together. It's also very important to monitor our managers on an ongoing basis, and this is something that we do with every board meeting. And we look closely at their performance, and we also look very closely at the investment guidelines, and make sure that they're following all those guidelines, and that we're very comfortable with what they're doing for our shareholders.

PRESENTER: And what's the experience of the board in picking good long-term fund managers?

SUSAN PLATTS-MARTIN: Well, the board do take advice on this, so we've changed our manager line-up twice since the multi-manager structure was introduced in 2005. And on both occasions, we've employed an external consultant to source the best possible portfolio managers from around the globe, to give the board the opportunity to select the best portfolio managers that we believe will serve our investors well from across the world, but investing in that region.

PRESENTER: So when you select a manager, how long are you looking to employ them for?

SUSAN PLATTS-MARTIN: Well, the first thing we do when we select managers is, of course, look at their track record, and look closely at their style of investing, and how that performs against different market environments. We would be looking for taking a three to five-year view, when we're looking ahead at performance from our fund managers.

PRESENTER: When were you appointed chair of the trust? What's your background?

SUSAN PLATTS-MARTIN: So I've been on the board of Witan Pacific since the middle of 2014. And I became chair of the trust following the AGM in 2017. My background is that I've worked in investment management for 26 years in a variety of roles. And I've also been involved in setting up investment trusts, and running an investment trust division.

PRESENTER: Witan Pacific is the only investment trust that's investing in Asia Pacific, including Japan, at the moment. Why have you got such a unique strategy?

SUSAN PLATTS-MARTIN: Well, you're right; it is the only investment trust that invests in Asia Pacific, including Japan. It's not the only investment vehicle that has that investment strategy. But we believe that the strategy is a valid one, because that region is changing rapidly. And if you look at our benchmark, Japan, 10 years ago, was 60 percent of that benchmark. Now it's down to 40 percent. So the region is evolving. China will become a growing part of the benchmark as we look forwards. But also, the region is far more interdependent, and there's far more investing and trading going on throughout that region, which we believe means that having a developed country alongside the fast-growing economies of Asia makes a compelling investment case.

PRESENTER: What do you do, as a board, to try and control the discount on this trust?

SUSAN PLATTS-MARTIN: So the first thing we do is, we keep the discount under close review at every board meeting. But we would, first and foremost, focus on marketing the trust to make sure that investors are aware of the trust, what it offers; to create demand for the shares. However, if the discount is trading at an anomalous level compared with other trusts investing in the Asian region, then we do buy back shares. And that has the benefit of providing liquidity for redeeming shareholders. But also, for those remaining shareholders, it does add to the net asset value.

PRESENTER: Now, the trust has got a 12-year history of growing total dividends to shareholders. How have you managed that? And is that policy sustainable?

SUSAN PLATTS-MARTIN: Well, the growth and dividends is largely due to the fortunes of the companies that it invests in in the region. And the dividends in the region have grown hugely in the last 10 to 15 years, alongside the prosperity that the region has to offer. But one of the advantages of the investment trust structure is that we're able to put revenue aside in some years to top up the dividend in leaning years, and therefore, we have been able over the last 12 years, and we do think it's sustainable to be able to increase the dividend in line, or indeed in excess, of inflation.

PRESENTER: So why should investors consider Witan Pacific?

SUSAN PLATTS-MARTIN: Well, it invests in a very exciting dynamic part of the world, and the investment trust structure is ideal for accessing that region. And not least, because it allows us to grow the dividend because of benefits of the structure. But we have four specialist managers offering investors a one-stop shop for the region.

PRESENTER: Susan Platts-Martin, thank you.