The Scottish American Investment
Founded by Scottish lawyer William Menzies, SAINTS was the first investment trust to be established in Edinburgh and also the first to exclusively invest in the US. SAINTS initially invested in railways and ranches, taking advantage of the expansion westwards of the US in the late 19th century.
At the time, America was very much an ‘emerging market.’ Bonds in the US yielded more than those in the UK, although both currencies were tied to the gold standard, i.e. there was ostensibly no currency risk.
During World War I, investment trusts, including SAINTS, were forced to repatriate overseas assets by the British government to buy UK war bonds. After the war, SAINTS became a global investment trust, holding UK equities and bonds, as well as overseas shares and unquoted securities.
The company successfully navigated the turbulent investment world of the 20th century, which included two world wars, foreign exchange controls, the double taxation of dividends and even the loss a small amount of securities on the Titanic in 1912.
Stewart Fund Managers
Stewart Fund Managers was set up as a distinct company by Jack Shaw Stewart, who had joined SAINTS in 1961. The Board of Directors of SAINTS believed the creation of a separate fund management company, as well as the management of a limited number of outside funds, would help it attract and retain talented managers.
A number of unit trusts investing in the UK, US and Australia were launched by Stewart Fund Managers in the early 1970s. Central to this was a belief in the benefits of long-term investing and the need for transparency when reporting to investors.
Stewart Fund Managers merged with Ivory & Co to form Stewart Ivory in 1985. Ivory & Co was an Edinburgh-based private client investment manager founded in 1981 by the brothers James and Ian Ivory who were both former partners of Ivory & Sime.
The merger provided Stewart Ivory with a broad revenue base from unit trusts, pension funds and private clients, although SAINTS remained the most significant client.
Asia Pacific capability developed
In 1988, Angus Tulloch joined Stewart Ivory to develop an Asia Pacific capability. The Asia Pacific Fund, initially known as the New Pacific Fund, was launched in June 1988. Keen to invest in Chile in the early 1990s, Angus took a map of the world to the trustees to demonstrate it had a longer Pacific coastline than any Asian country. The Global Emerging Markets (GEM) Fund was subsequently opened in 1992.
Scottish Oriental Smaller Companies Trust
In line with Stewart Ivory’s investment trust tradition, the Scottish Oriental Smaller Companies Trust was floated in 1995 with a remit to invest in smaller companies in the Asia Pacific region. The Trust is now managed by First State Stewart Asia.
First State Investments
Stewart Ivory was acquired by Australian financial services group Colonial in 2000 and in the same year Colonial was purchased by the Commonwealth Bank of Australia. The overseas fund management business of Colonial was merged with Stewart Ivory to form First State Investments (FSI) with offices in Edinburgh, London, Hong Kong and Singapore.
The investment team increasingly concentrated on Asia Pacific and GEM strategies. In 2002 the private client business of Stewart Ivory was sold to Adam & Co.
Asia Pacific and Global Emerging Markets All Cap strategies closed to new investment.
The focus on existing clients and prudent capacity management was highlighted in 2003 when Asia Pacific and GEM All Cap strategies were closed to new investment and further closures have followed for other funds.
The first Sustainability product, the Asia Pacific Sustainability Fund, was launched in 2005. In 2010 the Sustainable Funds Group became managers of Pacific Assets, an Asia Pacific investment trust.
Worldwide Fund launched
Worldwide extended a philosophy based on investing in quality companies at reasonable prices to a global context. To some extent this saw a return to earlier years with a renewed focus on global as opposed to regional equities.
In 2012, the Asia Pacific/GEM team became First State Stewart, a stand-alone investment management boutique within FSI.
In July 2015, First State Stewart split to form two separate teams: First State Stewart Asia (headquartered in Hong Kong) and Stewart Investors, an autonomous businesses within FSI (headquartered in Edinburgh). The separation recognised the importance of working as small dynamic investment groups and a desire not to grow assets under management at the expense of investment returns.
Stewart Investors’ investment philosophy, founded on the principle of long-term stewardship, has remained almost unchanged in more than 25 years.