Alliance Trust lands another blow in battle with hedge fund

17th April 2015


Alliance Trust chair Karin Forseke has written to shareholders to urged them to vote against plans proposed by the trust’s biggest shareholder, stating that Elliott Advisors are not working in their best interests.


The £2.8 billion investment company has posted a letter to shareholders as it tries to defence itself against US hedge fund Elliott Advisors’ plan to put three new additional directors on the board. Elliot owns a 12% stake in the 126-year-old company.


In the letter send ahead of the AGM on 29 April, Forseke (pictured) said that the claims and counterclaims have been put forward but ‘it all comes down to a simple question: who do you trust to run your company?’.


She said that the current directors are ‘acutely aware of our responsibility for the stewardship of the company’s heritage’ and that they have set out a strategy that will enable it to deliver ‘strong and sustainable investment performance for shareholders over the longer term’.


Forseke then goes on to stress the importance of corporate governance and being held accountable to shareholders and questions the motives of Elliott.


‘We have previously described Elliott and their affiliates as a business that seeks to influence companies to change their strategic direction through public and disruptive campaigns,’ she writes.


‘As a hedge fund manager they do this to create value for their own investors and we believe they have very different perspectives from other shareholders of Alliance Trust.’


Forseke added that opposition was not just focused on the new directors but the fact Elliott or the candidates have not shared their strategic plans for the business.


‘The board has concluded that the Elliott Resolutions are not in the best interests of shareholders as a whole, and unanimously recommends that you should vote against the Elliott Resolutions,’ writes Forseke.


‘Our recommendation is clear because we believe that this is a critical moment for the future of the company that you own.’


This is not the first time Alliance Trust has contacted shareholders with its thoughts on Elliott, sending a circular referring to the ‘numerous’ sanctions its says the hedge fund has faced in the Us and Switzerland.




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