Alliance Trust Under Attack

Alliance Trust, an investment trust held by many private investors, is coming under attack for poor performance and poor corporate governance for a second time. It defeated a campaign by Laxey Partners back in 2011, and although their AGM resolutions were defeated the company did subsequently make some changes – for example more share buy-backs were done to help control the share price discount. This time it is the turn of Elliott Advisors who control over 12% of the shares. They have requisitioned resolutions for the Annual General Meeting in late April to appoint three new non-executive directors.

At the time of writing the discount to NAV on the company’s shares is 14.6% according to the AIC, which is generally higher than most large non-specialist investment trusts where discounts have narrowed recently. The performance of the company’s shares over the last 5 years has been 66.5% based on share price total return.

Alliance is unusual in that it is a self managed trust and also has other business activities in addition to the management of the investment trust fund. It also has a peculiar arrangement for recording votes as being cast by investors in their savings scheme who do not themselves vote.

ShareSoc will probably make some comments and provide more information on this matter once we have understood the details for the reasons of these proposals.

Roger Lawson

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