THE board of Alliance Trust has come under further pressure after private investor group ShareSoc said it backed attempts by hedge fund Laxey Partners to instigate a shake-up at the Dundee investment giant.
Shareholders will vote on April 27 on resolutions proposed by Isle of Man-based Laxey that would force £2.1 billion Alliance to consider appointing an external manager and look at new means of increasing its dividend.
Last year Laxey, with the backing of ShareSoc, failed in its attempt to force the trust to adopt a strict discount control mechanism that would limit the gap between its share price and the value of the underlying portfolio.
Roger Lawson, chairman of ShareSoc which champions the interests of small investors, said: "We do support the continuing action by Laxey Partners.
"It is clear the performance of Alliance Trust is still inadequate and hence the discount is still too large.
"Although it is a very large investment trust, that does not explain why it has consistently under-performed ... some change of fund management might be a sensible move."
Aberdeen Asset Management has made it clear it would be interested in taking on the portfolio.
Chief executive Martin Gilbert is said to have met major shareholders in the trust and sought their signatures to a letter supporting the appointment of Aberdeen as manager. Aberdeen said these conversations had been initiated by the shareholders themselves.
Mr Lawson said: "It would clearly be expensive to unwind the existing arrangements though.
"Usually if a fund is underperforming, it's more a question of firing the individual fund managers than changing the whole basis of the management."
He said his personal view was that he did not want Aberdeen to run Alliance due to his unhappiness about the way shareholder votes are allocated in its savings schemes.
Alliance Trust maintains that chief executive Katherine Garrett-Cox has done a good job of improving the trust and points to a 7% increase in its dividend last year. Since seeing off Laxey last year Alliance Trust has been increasingly active in buying back shares to narrow its discount.
Yesterday it announced it had spent £1.1 million buying another 298,000 shares.
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