The broking house working for Elliott Advisors in its challenge to Alliance Trust has defended its support for Elliott.
Numis Securities said it had been accused in one report, by an anonymous Alliance Trust source, of hypocrisy in being "a supposed promoter of the sector appearing on the side of an activist hedge fund".
Elliott, which holds a 12.2 per cent stake, is asking shareholders to vote three new directors onto the board at this month's annual meeting. But Alliance says its real goal is a partial liquidation of the £2.9billion trust for short-term gain, against the interests of all shareholders.
In a review of the battle so far, Numis has countered that Elliott's move is "not simply a case of an opportunistic trade by a short-term shareholder".
It says: "Elliott has not proposed any specific course of action. Instead it has proposed the introduction of 'fresh blood' to the board. Elliott has provided compelling evidence, in our view, to question the status quo, citing Alliance Trust's failure to deliver strong performance or address a wider discount than its peers, whilst paying high remuneration to the CEO."
Numis goes on: "Ultimately, a refreshed board may lead the company in a different direction, by questioning whether the current strategy is optimal. However, it is worth noting that the three new directors, if appointed, would represent a minority on the expanded board of ten, and their statutory responsibility would be to act in the interests of shareholders as a whole."
The broker says it recognises that Elliott's objectives are likely to differ from the majority of retail investors, but it does "not see this as a conflict if it leads to improved performance and a tighter discount". The board had also implied that Elliott's proposals would put the dividend at threat. "However, Elliott has not called for a dividend cut, but has simply questioned the sustainability of the current dividend."
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