Alliance Trust has overhauled its structure and sharpened its mandate, while chief executive Katherine Garrett-Cox will step down from the board, as the 127-year-old fund continues its efforts to appease shareholders.
The investment trust, which has recently conceded a lengthy battle with activist investor Elliot Advisors, will introduce a "fully independent" board of directors, meaning Garrett-Cox will leave the board, although she will remain as chief executive of Alliance Trust Investments (ATI). Susan Noble will become chair of ATI and, as a consequence, will also retire from the board.
Chief financial officer Alan Trotter is leaving Alliance Trust "to continue his career in a publicly-listed company elsewhere".
The trust, which has come under criticism for meandering from its core focus, will introduce the MSCI All Country World Index as its formal benchmark "setting a clear measure against which to assess the trust's performance". Helpfully, the fund has outperformed this index by 2.3 per cent since the new team took over management of the portfolio in September 2014.
It will also dispose non-core investments in fixed income, legacy mineral rights and property "as soon as is practicable". The trust's private equity investments will mature over the next few years and proceeds will be reinvested back into equities.
"This simplification of the trust will give greater clarity to its investment proposition," the company said in a statement.
Charges will be dropped to 45bps or less by the end of 2016 – last year charges stood at 60bps. It will also implement a "significant" cost reduction programme, which management claims will save £6m by 2016. Alliance Trust will implement a buyback scheme to narrow the investment trust's discount down to single figures.
All this is expected to improve investment performance and narrow the discount – both areas of concern for Elliot Advisors and other shareholders.