The Courier & Advertiser (Angus and Dundee)
Elliott exits as Trust gets approval for fund change
Willis Towers Watson to oversee management of Alliance Trust cash
Activist investor Elliott will be off Alliance Trust’s shares roster within weeks after a £620 million deal to buy out their stake was given the green light.
Small shareholders yesterday backed a plan by the Dundee-headquartered trust to ease Elliott out of the door and bring an end to one of the most turbulent periods in the group’s history.
Investors who gathered for the general meeting heard the trust plans to liquify assets within the equity portfolio in order to buy out Elliott’s 19.75% stake.
Deputy chairman Gregor Stewart said the deal struck with Elliott to exit was positive for the trust.
He said: “The board believes the repurchase is in the best interest of all shareholders and will provide an immediate uplift of approximately 1% (to net asset value) to continuing shareholders.”
It is expected that Elliott will be off the roster by the time the company holds its AGM in Dundee on April 27.
Elliott’s profile rocketed ahead of the trust’s 2015 general meeting when it put forward proposals for boardroom change. Alliance, then led by chief executive Katherine Garrett-Cox and chairman Karin Forseke, spent £3m defending its position but ultimately lost the battle and two Elliott nominees were eventually co-opted on to the board.
Within months, the former management team had left and veteran Scottish businessman Lord Smith of Kelvin was drafted in as new chairman.
He promised change at the 2016 AGM and a consultation was held over several months last year to determine the future direction of the trust.
That led to December’s announcement of the intention to work with WTW as part of a new multi-manager investment model which came with improved performance targets.
The move was controversial due to WTW’s involvement at an early stage in the consultation process.
The trust had previously stated its belief there was no conflict of interest in WTW’s proposed appointment – a point Lord Smith was forced to reiterate at the meeting when the situation was raised by shareholders.
Lord Smith also addressed the thinking behind the deal to allow Elliott’s exit, saying the board wanted the trust to grow and the way to go about that was to “get rid of this overhang”.
Senior indepedendent director Karl Sternberg said the ongoing campaign of share buybacks, and the removal of Elliott from the roster were short term measures towards the longer-term goal of improved investment performance.
All four resolutions put to shareholders, including two special resolutions that required a 75% majority in favour, were duly passed.