Elliott Advisors has hit back at Alliance Trust with criticisms of its performance, charges and remuneration as the feud between the trust and its activist investor escalates.
Alliance Trust had last week published a circular letter to its shareholders, urging them to reject the appointment of three independent directors recommended by Elliott.
The circular had defended the performance, corporate governance at the trust and said Elliott’s proposals were not in the long-term interests of other shareholders.
But Elliot today said the circular “fails to engage on matters of substance and resorts to personal attacks”.
The US hedge fund then set out its rebuttal to the circular, in which it outlined that “over all relevant return periods Alliance Trust has underperformed its sector peers and relevant benchmarks”.
It cited data that £1,000 invested in the trust when current chief executive Katherine Garrett-Cox took over would now be worth £1,671, compared to £1,848 if the money had been “invested in the global stock market”.
Elliot claimed Alliance Trust’s published ongoing charges figure of 0.6 per cent was not a true reflection of the costs incurred by investors.
The note said “the true cost to shareholders of managing the trust was 0.9 per cent last year, and was 1.0 per cent on average over the past five years”.
Elliott also rejected the suggestion from Alliance Trust that its nominated directors would not be independent and said: “By any standard of accepted governance principles, the nominated directors are truly and fully independent and, if elected, would not countenance being unduly influenced by any particular shareholder in any way.”
Both Elliott and Alliance are in the process of canvassing votes for the nomination of the three non-executive directors, Anthony Brooke, Peter Chambers, and Rory Macnamara.
The vote will take place at Alliance Trust’s Annual General Meeting on April 29.
