Alliance Trust Investments currently employs about 200 people in London and Edinburgh.

The £30 million sale is expected to be completed in early April 2017.

According to the firm’s review, “good progress” has been made since ATI’s separation in October 2015 in establishing an independent board, growing third-party funds under management, reducing costs and making the business profitable on a monthly basis on continuing operations.

The review adds: “As part of the Strategic Review, the Board has reached agreement to sell ATI to Liontrust Asset Management Plc (Liontrust), a specialist fund management company that has been listed on the London Stock Exchange since 1999.

“The consideration is up to £30 million; comprised of up to £10 million in cash, being the anticipated value of net assets at the time of completion, £17 million in Liontrust shares, £13.6 million of which will be issued on completion and the balance 12 months later, and £3 million in cash as a contingent consideration, dependent on the future level of assets under management payable two years after completion.

“After taking account of costs associated with the transaction, it is expected that net proceeds will be not less than £25 million, before any future contingent consideration. This compares to the ATI book value of £19.8 million as at the end of June 2016.”

The sale “will simplify Alliance Trust’s structure and provides ATI with an exciting opportunity to continue to develop its growing third party fund management business”.

As part of the agreement, Alliance Trust has agreed to hold the share-based element of the consideration for at least 12 months.

Lord Smith of Kelvin, chairman of Alliance Trust, said: “Since May, the Board has evaluated carefully a broad range of options, with an open mind and a clear line of sight on how best we could improve the Trust’s performance.

“We believe there is good appetite for a global equity investment trust and that will remain our overall positioning. However, we are proposing a new approach to the investment management of the equity portfolio. Our proposal is that we will move from a single manager to multiple equity managers. All managers will be rated best-in-class and each will create a focused portfolio of their best investment selections.

“We are confident that this exciting and differentiated investment approach will help to improve Alliance Trust’s performance on a consistent basis. Accordingly, we have doubled the level targeted for outperformance, reaffirmed our ambition to continue our track record of year-on-year dividend growth, yet at a competitive cost. We firmly believe that this will put Alliance Trust on a strong footing for many years to come.”