All Alliance Trust changes get big green light

Shareholders in Dundee-based Alliance Trust have overwhelmingly voted to back the investor’s board and its plan to switch from a single manager and a socially responsible investment focus to a multi-manager approach.

Shareholders also gave their approval to the Trust buying out rebel activist Elliott’s near 20 per cent holding in the company.

Around 100 investors gathered in Edinburgh yesterday for a general meeting to approve the board recommended mutli-manager scheme which would be overseen by global investment advisor Willis Towers Watson (WTW).

The change was supported by 96 per cent of shareholders and is now expected to take place in April.

Shareholders also pledged their support to allow Alliance Trust to repurchase shares from Elliott Advisors - the activist investor that over the past seven years has steadily built up its stake in the trust and is today the largest shareholder with a 19.75 per cent stake in the 129 year old firm.

The agreement ends a long-running battle over the direction of Alliance Trust that has seen a number of changes take place, both in terms of personnel at board level and strategy.

It is expected that the buyout will cost in the region of £620 million and be completed in a series of transactions in the coming weeks.

It is expected that Elliott will be off the roster by the time the company holds its AGM in Dundee on April 27.

In response to questions relating to the cost of the buyback, Deputy chairman Gregor Stewart sought to alleviate concerns, stating it would result in a “solid and supportive share register” going forward.

He added the wider changes would give the Trust a “fresh start” from which to build.

“The board believes the repurchase is in the best interest of all shareholders and will provide an immediate uplift of approximately 1 per cent continuing shareholders,” Mr Stewart said.

Meanwhile, the shift to a multi-manager format will see the Trust remain a global equity portfolio, but asset management will be outsourced to eight external fund managers who were named last month by Willis Towers Watson Investment.

Three of the managers are based in London: Jupiter Asset Management’s Ben Whitmore, River and Mercantile’s Hugh Sergeant and Veritas’s Andy Headley.

The rest are located in North America: Canadian-based Black Creek Investment Management, First Pacific Advisors, GQG Partners, Lyrical Asset Management and Sustainable Growth Advisers.

Chairman of Alliance Trust, Lord Smith of Kelvin, said he was ‘delighted’ by the level of shareholder support for the change to a multi-manager style.

He added: ‘The aim of the new approach is to achieve consistent outperformance at a competitive cost, with a progressive dividend policy. The focus of the board and the new investment manager is to deliver on those ambitions for many generations to come.’

Meanwhile, Alliance Trust Investments, the fund management arm, is being sold to Liontrust.

The trust’s current management team, including Peter Michaelis, head of Alliance Trust Investments’ Sustainable Future fund range, will move to Liontrust.

Michaelis and his team took over the management of Alliance Trust in September 2014. The portfolio was restructured to adopt a socially responsible investment approach.