Activist investor Laxey Partners has proposed a review of Alliance Trust’s management and the possibility of having an external investment manager.
Laxey Partners – which last year sought to bring in tighter discount controls and change voting arrangements – has requested an ordinary resolution be put forward at its annual general meeting (AGM) on April 27.
The resolution requires: “that the directors shall, as soon as practicable following the passing of this resolution, conduct a comprehensive review of the company to determine what steps can be taken to improve the management of the company’s affairs (in terms of addressing the investment performance of the company and the discount at which the company’s ordinary shares trade to their net asset value). This review should include the possibility of externalising the investment management of the company’s portfolio and should also bring forward proposals which would enable shareholders who wish to sell their ordinary shares, to do so at a price which more closely reflects net asset value.”
The investment trust is currently sending its annual report and AGM notice to investors, and will send out the separate circular regarding the requisition with its responses shortly.
A spokesperson for Alliance Trust says: “The business has undergone considerable development since Laxey’s proposals were defeated at last year’s AGM.
“At our full year results we delivered top quartile total shareholder return and our main priority remains to continue to improve the investment performance of the business.”
Colin Kingsnorth, chairman of Laxey Partners, says: “Last year, we successfully instigated shareholder debate and action on the ’scale‐up’ in the savings plans and the buyback.
“However, a year on, the performance continues to be poor, the discount has widened and the board is changing substantially.”
He adds: “We call on Karin Forseke, our new chairman, to conduct a comprehensive review of the management of the company’s affairs.
“This should explore the possibility of externalising the management contract and determine appropriate actions to further enhance the performance and rating of Alliance to the benefit of all shareholders.”
The move is the latest blow for Alliance Trust, which analysts at Winterflood Investment Trusts said investors should make a “hasty exit” from last week.