Alliance boss faces call to quit

THE boss of Alliance Trust has come under mounting pressure to bow to investors’ wishes or quit, after a broadside f r om a f ormer board director.

Chief executive Katherine Garrett-Cox, pictured, is resisting moves by activist US hedge fund Elliott Advisors to appoint new board members who will shake up the underperforming investment trust.

But Tim Ingram, a nonexecutive director of Alliance from 2010 to 2012, yesterday backed Elliott, in a public blow to the company. He told the Mail that GarrettCox should be forced to stand down f rom her £1.4m-a-year role if she did not allow major changes to the way the group is run.

Alliance manages £3.6bn of investments on behalf of clients – a highly unusual move within the industry – but its performance has lagged rivals, according to Ingram. Elliott has built up a 12pc stake in the company and has put forward a vote at next month’s shareholder meeting to have three new directors appointed to the board. It i s expected that, if elected, they will push for Garrett-Cox to outsource at least some of the portfolio management – a move that would be likely to result in her taking a pay cut. They will also pressure her to offload two lossmaking divisions. Ingram said yesterday that the way the group is run by Garrett-Cox ‘is not in the interests of shareholders’ – around 70pc of whom are retail investors. He added: ‘If she was prepared to look at the obvious, which is outsourcing the management, and she is prepared sell businesses that constantly lose money, then there’s no need for her to go.

‘But if a chief executive is not prepared to do what the majority of the board wants, then they should go.’

In an open letter to shareholders, Ingram publicly backed Elliott’s move, and said that ‘any other shareholder seeking better returns does likewise’.

In a particularly stinging remark, he said shareholders ‘would have been better off investing over the five-year period in any of the other large global investment trusts’, adding that Alliance’s performance had been ‘dismal’.

An Alliance Trust spokesman said the company ‘has clearly set out its reasons for rejecting Elliott’s requisitions’.

He added: ‘We believe their interests are at odds with other shareholders and this is just the start of their disruptive action.’