Market watch: Discount still pressures Alliance Trust

By PETER RANSCOMBE
Published on 09/03/2013 19:00

ALLIANCE Trust boss Katherine Garrett-Cox is expected to set out her vision this week for the £2.6 billion investment firm now that it has shed the spectre of activist investor Laxey Partners.

Having seen off the London-based hedge fund at last April’s annual general meeting – a move that prompted Laxey to sell off its 1.7 per cent stake – Garrett-Cox has been overhauling Alliance Trust in a bid to improve performance.

The trust has narrowed the gap between its share price and the value of its assets to 13 per cent less than assets – an improvement on the 15 per cent gap of a year ago, but still shy of the peer group average of about 9 per cent.

While the figures from Tuesday’s full-year results are expected to contain few surprises, analysts are keen for news on where the trust is headed. Stephen Peters, of Charles Stanley, said the trust needs to “establish what it wants to be”.

“Right now performance is average, but does it want to be average?” he said. “I don’t think Garrett-Cox wants it to be average. I think she wants it to be top-of-the-table.”

Simon Elliott, of Winterflood, agreed, saying the trust still had “some way to go before it is going to register on most people’s radar”.

“Really the main thing for us is to see how that reorganisation is bedding down, and how the different members of the team are interacting.”