Activist shareholder Elliott increases Alliance Trust stake

Elliott Advisors, which is part of New York firm Elliott Management, now owns just under a quarter of the Dundee-based business after increasing its shareholding from 17 per cent.

Alliance Trust unveiled a change in investment strategy earlier this month, the latest in a string of moves aimed at appeasing investors following a high profile revolt headed by Elliott in 2015 as a result of sustained underperformance at the historic investment firm.

Katherine Garrett-Cox, one of the City’s most high-profile women in business was forced to step down from the group’s main board and later as head of Alliance Trust Investments amid the fallout.

Lord Smith of Kelvin was later appointed chairman, replacing Karin Forseke, who also stepped down as a result of the showdown.

The episode also saw Alliance Trust agree to co-opt two of Elliott’s three nominated independent non-executive directors onto the board, having previously fought against the proposal.

And the group said recently it would outsource the management of its equity investments to eight external managers, a strategy which Elliott said it had “long advocated”.

Examples of under-performance at the Trust compared to its peers and benchmarks pointed to by Elliott at the time of the hedge-fund manager’s revolt, related to £1,000 being invested in the business around the time of Ms Garrett-Cox’s appointment in 2007.

Elliott said the investment would have grown to £1,671 with Alliance Trust but £1,848 if invested in the global stock market.

In June last year, Alliance Trust shares surged in value after a company with links to the Rothschild banking dynasty, RIT Capital Partners, confirmed it was in talks about a potential “merger”.

RIT Capital later withdrew from the talks, which came after Cannacord Genuity and other specialist advisers were appointed to advise Alliance Trust on its future direction.