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Alliance Trust’s (LON:ATST) high profile boss Katherine Garrett-Cox is to step down from the 127-year old investment company’s main board after another top level shake-up.
She leaves her role as chief executive of the PLC to become head of the company’s fund management arm, Alliance Trust Investments (ATI).
Alliance said its PLC board is to become “fully independent” and comprise solely non-executive directors.
Garrett-Cox’s departure, along with two other board members, follows a bitter public feud with activist investor and major shareholder Elliott Advisors earlier this year.
In one of the most acrimonious boardroom battles seen in the fusty world of investment trusts, Elliott claimed Alliance had under-performed over a long period of time.
To arrest this, Elliott proposed changes to the management and board structure with the addition three non-executive directors to Alliance’s board.
After a public spat, the feud ended abruptly days before shareholders were due to vote, with two of Elliott’s choices, city heavyweights Anthony Brooke and Rory MacNamara, joining Alliance’s board as non-executive directors.
“In the run up to our AGM, many of our shareholders indicated that they sought change,” Karin Forseke, chair of Alliance Trust, said today, adding that the overhaul was a reflection of this.
After a “disappointing” first half to the year, she said the board was “actively engaged in addressing” shareholder concerns.
Current board member Susan Noble is to become the chair of ATI, with chief financial officer Alan Trotter leaving the company altogether.
Alliance will also create a new “management engagement committee”, chaired by former Deutsche Asset Management executive Karl Sternberg, to review investment performance.
Alliance said it was pleased with the performance of ATI, arguing it has beaten the benchmark index by 2.3% since September 2014.
In the event performance dips against the new benchmark, however, a full review will be undertaken and external managers considered.
The MSCI All Country World Index is to be the formal benchmark against which the trust’s performance can be measured.
ATI will charge to Alliance Trust a management fee of 0.35%, “one of the lowest in the industry” it said.
Forseke said: “These changes have the full support of the board.
“Implementation will require considerable further work by the team but we believe that as a result Alliance Trust will be significantly better positioned for the future.”
The company reiterated that it would continue its progressive dividend policy, paying out all net income as ordinary dividends.
It is also committed to use share buybacks, as required, to narrow its current discount into single figures.
Shares rose 2.3%, more than 10p to 468p today as investors showed their support for the moves.