Activist investor defeated in Alliance Trust vote

Alliance Trust shareholders rebuffed calls for change from an activist investor at its packed annual meeting today.

More than 350 shareholders met with Alliance at Dundee at the largest annual meeting in decades to discuss whether the trust needed a formal mechanism to control its lagging share price.

Investors voted down calls from hedge fund Laxey Partners to force the trust to buy back shares whenever its share price fell more than ten per cent below Alliance’s net asset value.

A third of shareholders voted to support Laxey’s demands but were defeated as 66 per cent voted for the board.

Chief executive Katherine Garrett-Cox (pictured), dressed for battle in a red suit and shoes, will now continue the trust’s new policy of ‘soft buybacks’, an informal system of buying back shares supported by stockbroker Brewin Dolphin.

Alliance Trust, which manages £2.3bn of funds, has bought back about £50m of shares since February, which is now keeping its share price discount to net asset value at 15 per cent or less.

“While Laxey's attempts to force Alliance to introduce a formal discount policy failed, the so-called soft DCM, as advocated by Brewin Dolphin in its April 5 crunch meeting with the Alliance board has now been enshrined in the trust's modus operandi going forward,” said John Newlands, Brewin Dolphin’s head of investment companies research.