Investment Managers’
Presentations27th April 2017
This financial promotion has been approved by Towers Watson
Limited (Willis Towers Watson), authorised and regulated by the Financial Conduct Authority.
This presentation includes certain information and materials prepared for Alliance Trust plc by Willis Towers Watson. This
presentation has been prepared for general information
purposes only and must not be relied upon in connection with
any investment decision. Potential investors should seek
independent financial advice from a financial advisor who is
authorised under the Financial Services and Markets Act 2000 before making any investment decision. The important
information on pages 31 and 32 should be read in conjunction with this document.
Agenda
2
1. Update on new portfolio from Willis
Towers Watson
Craig Baker, Global CIO
David Shapiro, Portfolio Manager
2. Presentation from River and
Mercantile Asset Management
Hugh Sergeant, CIO Equities
3. Presentation from Sustainable
Growth Advisers
George Fraise, Founding Principal
and Portfolio Manager
4. Q&A
willistowerswatson.com
Alliance Trust
Willis Towers Watson
27th April 2017
Craig Baker and David Shapiro
willistowerswatson.com
Multi-manager approach: Best of the best
4
Best in class1 managers selecting best ideas
Equity
Managers
Willis Towers
Watson
The Board &
ExecutiveGoals of the new approach
• Consistent outperformance
• At a competitive cost
• Continuing the progressive
dividend policy
High conviction portfolio
willistowerswatson.com
A multi-manager portfolio
5
More consistent outperformance
More robust and sustainable structure
Less reliance on any one manager/style
Increased skills through specialism
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Focusing on high conviction portfolios
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-0.3 -0.3
-0.5
-0.1 -0.1
0.2
0.0
0.7
0.8
1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1 (Lowest) 2 3 4 5 6 7 8 9 10 (Highest)
Ave
rag
e A
nn
uali
se
d A
lph
a (
%p
a)
Deciles of Active Risk
Alpha by Level of Active Risk (Manager's Chosen Benchmark)
Own less
of this
Own more
of this
Source: Sebastian & Attaluri (Conviction in Equity Investing, 2014)
Higher conviction portfolios
Bett
er
perf
orm
an
ce
willistowerswatson.com
BlackRock’s mandate as Transition Manager
7
Blackrock’s Role:
Manage Risk
Minimise Cost
Control Market Impact
1 Portfolio
transitioned to
8 Managers
(9 portfolios)
Commenced after completion of Elliott
Share Repurchase on 13 March 2017
Completed12 April 2017
Direct costs only 0.18%
Compared to an estimate of 0.30%
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Performance over the transition period
8
Legacy vs. Actual Transition Account portfolio performance during the transition period
Source: BlackRock
Performance data are unaudited estimates only, calculated based only on assets under BlackRock management, as transition manager, and reflects the theoretical
performance of the securities held by BlackRock at the start of transition versus the performance of the actual assets under BlackRock control during the transition.
-1.50%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
Legacy Portfolio Transition Portfolio
willistowerswatson.com
The Willis Towers Watson Investment Team
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Portfolio Management
Team of 15
Research
Team of 128
Craig
Baker
David
Shapiro
Mark DavisStuart Gray
Support
Team of 126
CIO
Data as at 31 December 2016
willistowerswatson.com
Your Alliance Trust equity portfolio today
10
51%
19%
10%
3%7%
0%
10%
57%
15%
6%8% 8%
0%
6%
0%
10%
20%
30%
40%
50%
60%
NorthAmerica
Europe exUK
UK Japan AsiaPacific ex
Japan
MiddleEast &Africa
EmergingMarkets
Breakdown by region
ATI MSCI ACWI
9%
17%18%
9%
22%
4%
14%
1%
5%
0%
10%
12%
18%
11%
17%
5%
11%
3%
7%
3% 3%
0%
5%
10%
15%
20%
25%Breakdown by sectors
ATI MSCI ACWINotes:
• Benchmark data as at 31 March 2016
• Alliance Trust portfolio data as at 11 April 2017
• Portfolio data excludes non-core assets and cash
Source: WTW, BNYM, MSCI, Factset, FTSE
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Top 10 stock holdings
11
Company %*
1 Charter Communications Inc 2.0
2 United Health Group 1.9
3 Microsoft Corp 1.5
4 Oracle Corp 1.5
5 Nielsen Holdings PLC 1.5
6 Western Union Co 1.4
7 Amazon Inc 1.4
8 CVS Health Corp 1.4
9 Johnson Controls International PLC 1.3
10 Nestle 1.2
* Percentage exposure excludes non-core assets and cash, as at 11 April 2017
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Your equity managers
12
Source: Willis Towers Watson and individual managers as of December 2016.
Bill Kanko, founder and President. Bill
was the lead manager for the Trimark
Fund and Trimark Select Growth Fund,
with combined assets of more than $13
billion.
Rajiv Jain founded GQG Partners in
June 2016, having previously worked at
Vontobel Asset Management for 22
years.
Ben Whitmore has over 20 years of
experience and joined Jupiter in 2006.
Pierre Py and Greg Herr are
co-portfolio managers with an
average of 20 years investing
experience.
Sustainable Growth Advisers (SGA)
was founded in 2003 by George
Fraise, Gordon Marchand and Rob
Rohn, they average over 30 years of
investment experience.
Lyrical Asset Management’s
investment management team is led
by Co-Founder and Chief Investment
Officer, Andrew Wellington.
Hugh Sergeant is the CIO of Equities
having previously been in a similar role
at Societe Generale Asset
Management ('SGAM') and prior to that
at UBS/Phillips & Drew and Gartmore.
Andy Headley is Head of Global
strategies at Veritas Asset
Management. Andy has over 20 years
investment experience.
Alliance Trust
Hugh Sergeant27th April 2017
14
What is the aim of our investment approach? Creating wealth for our clients through compound returns
Compound Returns
=
Wealth Creation
What type of investments do we look for?
Recovery
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Stock Picks
16
Good business
Self help
Valuation depressed
Profits below normal level
Profits start to recover
Recovery investing for Alliance Trust: Our definition of a recovery share
We look for 100% upside
Potential
Timing
Valuation
How do we find PVT stocks? We have a systematic and therefore repeatable process
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Fundamental Research
Conviction Alliance TrustPortfolio
MoneyPenny
Screening
Fundamental
ResearchConviction
Alliance Trust
Portfolio
We generate strong absolute and relative returns: Performance for our recovery strategies to March 2017
UK Long Term Recovery Fund
%FTSE All Share
%Relative
%Decile ranking
Since Inception: Cumulative 232.3 104.3 128.01st
Since Inception: Annualised 14.8 8.6 6.2
Source: River and Mercantile Asset Management LLP, as at 31 March 2017 & Financial Express Analytics The R&M World Recovery Fund and the R&M UK Equity Long Term Recovery Fund sit in the IA Global Sector and IA UK All Companies sector respectively. Past performance is not a guide to future performance. UKLT inception: 17/07/2008 and UKWR inception : 04/03/2013, Z Class Shares
18
World Recovery Fund
%MSCI ACWI
%Relative
%Decile ranking
Since Inception: Cumulative 110.2 66.4 43.81st
Since Inception: Annualised 20.0 13.3 6.7
Value investing for Alliance Trust: We are believers in value investing
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• Value outperforms
• It makes sense (buying things cheaply!)
• It has made sense to lots of famous investors
• Hugh Sergeant has practiced it for 25 years
• And now it is at cyclical low point
Source: The Ken French data library
Asset Backed Long Term Performance in the US (low PB vs High PB relative cumulative return)
Value outperformance: It’s only just begun!
20Source: Sanford C. Bernstein & Co.; Pzena Analysis. Data as at Dec 31, 2016
Cyclical Low
Sector
Anglo American Mining
Applus Testing
Citigroup US Bank
ENI Oil
Gafisa Brazilian housing
Hugo Boss Almost Luxury
IBM Technology
Johnson Controls Heating and Aircon
Johnson Matthey Catalysts
Lloyds Bank
The portfolio for Alliance Trust: 20 High conviction Recovery stocks, diversified by sector, region and size
21Source: River and Mercantile Asset Management LLP
Sector
Malaysia Airports Airport
Naspers Online Investor
Nintendo Super Mario
Prada Luxury
Sands China Macau
Solocal Local online advertising
South32 Mining
Sumitomo Mitsui Financial Japanese Bank
TP ICAP Broker
Wells Fargo US Bank
Working with WTW and Alliance Trust
22
Source: River and Mercantile Asset Management LLP. performance is taken from the Eternity segregated account (gross of Fees) of the Global Concentrated Portfolio to the 28 February 2017. Past performance is not a guide to future performance
WTW and Concentrated Portfolios
• Long term relationship with WTW
• We have had many years experience managing concentrated portfolios in conjunction with WTW clients
• These require high levels of conviction by the manager
• These represent our very best ideas
• It will deliver better returns over the long term
• Important that this part of a broader portfolio of managers similar to the Alliance Trust mandate
• With a sophisticated and experienced adviser (WTW) creating and managing the overall portfolio
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17
Global Con Cumulative return MSCI ACWI Cumulative return
Our Track record in managing Concentratedportfolios for WTW
Alliance Trust
27th April 2017
George Fraise
Investment Team
24
Kishore Rao, Principal
TuckerBrown,
Principal
Hrishikesh (HK) Gupta,
Principal
David Oh, Principal
Peter Madej, CMT,
Research Analyst
Steve Skatrud, CFA,
Client Portfolio Manager
PatrickHolway, CFA,
CAIA, CIC,Client
Portfolio Manager
AlexandraLee, MD, Principal
GeorgeFraise,
Founding Principal
Gordon Marchand, CPA, CFA,
CIC, Founding Principal
Rob Rohn, Founding Principal
Luying Wang,
Research Analyst
Stability We have never lost an investment professional
Teamwork We have two analysts on every company
Culture Our culture is focused on understanding and controlling risk
Distinguishing Characteristics
25
Alliance Trust Portfolio
Alliance Trust
ValuationCash-Flow Based
QualityPricing Power
Recurring RevenuesFinancial Strength
GrowthOver 2x Earnings and Revenue
Growth vs. ACWI
26
Investment Approach
Three Pillars
Diligence
In Team-Based Research
Reduce Human Risk
Discipline
In Valuation
Reduce Price Risk
Selectivity
In Company Identification
Reduce Business Risk
27
Alliance Trust Portfolio Examples
28
Over 200 million active users and over 60
million Prime members
345,000 customers in more than 180
countries. 87% of Forbes Global 2000
are SAP customers
900 million consumers in 140 countriesMore than 2,000 global and local brands
and 330,000 employees selling products in
196 countries
2.5 billion Visa cards in use worldwide with
100+ billion total transactions per year
Fifth largest bank in India by assets with
87,000+ employees
Global leader in diabetes market with products
marketed in 180 countries
Leading provider of accounting software in
Australia and New Zealand. Approximately 1.2
million businesses use MYOB’s software
Serving over 29 million individual policies and
over 16 million members of group insurance
plans
Representative list of holdings as of 3/31/17. Portfolio holdings are subject to change daily. Under no circumstances does the information contained within represent a recommendation to buy or sell securities. Itshould not be assumed that investments in the securities were or will be profitable. The list provided may not represent all of the securities recommended for advisory clients. A complete list of all securitiesrecommended for the strategy in the preceding year can be obtained free of charge by contacting SGA at (203) 348-4742. It should not be assumed that future results will be reflective of past performance.
SGA Performance – Global Growth
SGA Global Growth11.3%
MSCI ACWI7.1%
Returns (gross of fees through 3/31/2017) are those of the SGA Global Growth Composite. SGA Global Growth Composite inception is 2/1/2011. MSCI ACWI Returns are Net Total Return (MSCI Net Total Return indexes reinvest dividends after the deduction of withholding taxes). Since Inceptionreturns are gross annualized and as of 3/31/17. The performance figures shown do not reflect the deduction of investment advisory fees. The prospective return will be reduced by advisory fees and any other expenses incurred in the management of the account. SGA’s fees are available uponrequest and also may be found in Part 2A of its Form ADV. Returns reflect the reinvestment of dividends, interest and other earnings. For interest and capital gains, SGA does not withhold taxes, for dividends SGA will withhold taxes as reported by the client’s custodian. Actual fees charged toclients may vary depending on, among other things, the applicable fees schedule and portfolio size. SGA’s fees are available upon request and also may be found in Part 2A of its Form ADV. Past performance does not guarantee future results. This information is supplemental and complementsfull disclosure presentation on composite performance found on the last pages of this document.
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80
100
120
140
160
180
200
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Cu
mu
lati
ve V
alu
e (
USD
)Since Inception
Performance
Questions
31
Important Information
• This financial promotion has been approved by Towers Watson Limited ("Willis Towers Watson"), authorised and regulated by
the Financial Conduct Authority. This presentation includes certain information and materials prepared for Alliance Trust PLC
(the “Company”) by Willis Towers Watson. Unless stated specifically otherwise, this presentation is not a recommendation, offer
or solicitation to buy or sell and any prices or quotations contained herein are for information purposes only.
• This presentation has been prepared for general information purposes only and must not be relied upon in connection with any
investment decision. Under no circumstances should this presentation nor any of the information contained within it be
considered a substitute for specific professional advice. Potential investors should seek independent financial advice from a
financial advisor who is authorised under the Financial Services and Markets Act 2000 before making any investment decision.
• All financial investments carry risk. The value of an investment, and the income derived from it, if any, may go down as well as
up and an investor may not get back the amount invested. Past performance is not a guide to future performance. This document
contains certain forward‐looking statements with respect to the financial condition, results of operations and businesses and
plans of the Company and its subsidiaries (the “Group”). These statements and forecasts involve risk and uncertainty because
they relate to events and depend upon circumstances that have not yet occurred. There are a number of factors that could cause
actual results or developments to differ materially from those expressed or implied by these forward‐looking statements and
forecasts. As a result, the Group’s actual future financial condition, results of operations and business and plans may differ
materially from the plans, goals and expectations expressed or implied by these forward‐looking statements. The Company
undertakes no obligation publicly to update or revise forward‐ looking statements, except as may be required by applicable law
and regulation (including the Listing Rules of the Financial Conduct Authority). Nothing in this presentation should be construed
as a profit forecast or be relied upon as a guide to future performance.
32
Important Information
• The presentation is based on information available to Willis Towers Watson at the date of this material and takes no account of
subsequent developments after that date. In preparing this material Willis Towers Watson has relied upon data supplied to it by
third parties. Whilst reasonable care has been taken to gauge the reliability of this data, Willis Towers Watson provides no
guarantee as to the accuracy or completeness of this data and Willis Towers Watson and its affiliates and their respective
directors, officers and employees accept no responsibility and will not be liable for any errors or misrepresentations in the data
made by any third party.
• In the absence of its express written agreement to the contrary neither the Company nor Willis Towers Watson and its affiliates
and their respective directors, officers and employees accept no responsibility and will not be liable for any consequences
howsoever arising from any use of or reliance on this presentation.
• NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES,
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