Elliott Advisors have raised their stake in Alliance Trust to 14%. After a battle before the last Annual General Meeting of Alliance, the company effectively conceded defeat by appointing two new non-executive directors as suggested by Elliott. But the issues raised by Elliott of a high share price discount to net asset value, and long-standing poor performance have not gone away – the discount currently stands at about 12%, much higher than most generalist investment trusts. Indeed many trusts are now on minimal discounts since they have become much more popular of late following the Retail Distribution Review (RDR).
From the feedback to ShareSoc’s own campaign to reform this trusts, long standing investors in Alliance have a large number of concerns about the management of the company and the investment strategy. Some feel “locked-in” because of the high discount and the problem that if they sold they would realise a large, and taxable, capital gain having held the Trust for many years.
More information on the issues around the Trust can be found on our campaign page here: http://www.sharesoc.org/alliance.html . The Alliance Trust Shareholder Action Group (ATSAG) supported by ShareSoc has been writing to shareholders on the register to get support for some changes. Any investor with an interest in the company should sign up to support this campaign.
It is clear from the increased stake that Elliott will continue to raise pressure on the Trust for change but private investors need to have their say in this matter also.