Investments  

Elliott Advisors increases stake in Alliance Trust

Elliott Advisors increases stake in Alliance Trust

Elliott Advisors, already the largest single shareholder in Alliance Trust, has revealed a sharp increase in its holding - five months after a showdown with the trust’s board was averted.

Alliance Trust faced a public battle with the hedge fund earlier this year, which ended with the investment trust adding two out of the three non-executive directors requisitioned by the activist shareholder.

Elliott had a stake of just over 12 per cent at the time of the AGM and has been building on its position since then.

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An announcement late on Friday revealed the hedge fund now holds ordinary shares equivalent to 9.9 per cent, and derivatives positions equivalent to a further 4.1 per cent holding.

When the new directors were appointed, Elliott confirmed it would not call a fresh general meeting until after the 2016 AGM at the earliest. Since that time the discount on the trust has remained wide, at just over 11 per cent.

Numis Securities said in a broker note released on Monday: “Elliott may no longer be in the public eye, but its growing presence on the shareholder register will continue to put pressure on Alliance Trust’s Board.”

Numis, a critic of the trust during its battle with Elliott earlier this year, added the trust had “lost its identity”.

Alliance Trust has rejigged its portfolio since the AGM and has reduced the number of holdings in its equity portfolio to a record low 68 positions at the end of June, down from 88 the year before.

Numis added: “It used to be regarded as a low cost, safe play that would tend to underperform in rising markets, but would outperform in weaker markets. However, this risk/return profile no longer applies.”