More pressure has been heaped on Alliance Trust after new voices joined the call for a shake-up of its board.
Investment Adviser has backed the motions which, if voted for by a majority of shareholders at the April 29 annual general meeting, would see three experienced new independent non-executive directors added to the board.
Several more investment managers and commentators have backed the stance.
James Calder, research director at discretionary manager City Asset Management, said the company would be “voting in favour of the motions”.
“The trust has been a serial underperformer for a number of years,” he said.
“Peers have had performance issues, too, but they have looked at changing people at the top or doing something about it.”
Mr Calder said activist shareholders were often looked upon with scepticism, but “Elliott seems to be a bit more forward thinking and has the moral high ground”.
“It also appears the three nominees are very independent from Elliott so there is no issue there,” he added.
Devon-based adviser Philip Milton, who runs Philip Milton & Co, said he used to hold “big chunks” of Alliance Trust.
“I regret to say I didn’t have it for the investment prowess of the team, which I didn’t really rate very highly,” he said.
“We held it as a discount play and did very nicely on it as a proxy for a global portfolio at such a discount. With hindsight the discount narrowed, we suspect, as Elliott was increasing its stake.”
Mr Milton said one of the trust’s “biggest failings” was not increasing its gearing at “the depths of the despair in 2009 when it could have done so, and really cheaply”.
“If it had done, perhaps now it wouldn’t have the trouble as it would have outperformed easily,” he added.
James Floyd, European director at Brook Green Capital, said he “very much agrees with the motion”.
“We think three new non-executive directors would be a very good move,” he said.
“The Alliance Trust position of getting investors to vote against it is short-sighted and aimed at keeping the status quo.”
Mr Floyd’s company markets overseas asset managers’ funds in the UK and places them on the Alliance Trust Savings platform for distribution. This was his reason for taking an interest in the debate.
“I believe their appointments would improve things,” he added.
A Cornish-based private investor, who requested anonymity, said he had already voted for the appointment of the three non-executives.
He said the trust had “not been as competitive as it should be” and that a “shake-up could only be a good thing”.
A spokesperson for Alliance Trust said it had received numerous messages of support from shareholders who had voted against the nominees, including comments such as: “I am very happy with the way the trust is run and I can honestly say it has never let me down yet”.