Alliance Trust hits out at hedge fund shareholder

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Alliance Trust hits out at hedge fund shareholder

Karin Forseke, the chairman of Alliance Trust, has struck back at hedge fund Elliott Advisors (UK), which proposed a shake-up of the investment trust’s board.

The investment trust came under pressure when shareholder Elliott Advisors nominated three new independent non-executive directors to the board, citing concerns about investment portfolio performance and other issues.

This was amplified when Roger Lawson, deputy chairman of ShareSoc, a not-for-profit organisation, said: “It is perfectly reasonable for Elliott Advisors to take up its worries with Alliance and propose directors if they feel the issues they have raised are not being dealt with.”

But in a circular, Ms Forseke told shareholders: “Your board believes this is just the thin end of the wedge, and they would then pursue disruptive actions, to the detriment of other shareholders, focused on helping them to sell their shareholding quickly.”

The Elliott Advisors resolutions will be voted on at the Alliance Trust annual general meeting on 29 April.

Adviser view

Jason Hollands, a managing director for Tilney Bestinvest, which has Alliance Trust shares, said: “It is very easy to see the situation from the prism of a nasty hedge fund acting in its own interest, but hedge funds have been a factor in encouraging boards to be more on their toes.”