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By Bradley Gerrard | Published Apr 27, 2012

Activist investor fails again in Alliance Trust attack

Alliance Trust shareholders have voted against a motion to potentially change the management of the vehicle put forward by activist investor Laxey Partners.

The board of the £2.1bn trust, managed by Katherine Garrett-Cox, had recommended shareholders vote against the motion, debated at the annual general meeting today (Friday) in Dundee, and 79.26 per cent followed the board’s guidance.

Laxey, an Isle of Man-based hedge fund, had requisitioned the board to put its calls to cut the trust’s discount and potential externalisation of its management to a shareholder vote.

Had they been successful, the plans could have triggered a review that would have cut Ms Garrett-Cox’s investment management role.

Karin Forseke, chairman of Alliance Trust, thanked shareholders for their “strong show of support”.

“The board puts investor interests at the heart of everything we do,” she said.

“We have listened to our shareholders and will continue to do so as we seek to deliver on our priority of a sustainable improvement in investment performance.”

In spite of its loss, Laxey issued a statement saying it had previously brought about “radical change” at Alliance Trust by “removing the flawed voting system” and introducing a buyback policy, which it claimed had benefited shareholders by £40m in the last financial year.

“We are very heartened by the response of our fellow shareholders and while our resolution was not adopted today, the debate we have instigated can only be deemed to be of benefit to all shareholders illustrated by the £40m net asset value (NAV) enhancement, minus the £2.5m the board has somehow managed to spend thus far,” Laxey said.

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