A SHAKE-UP of Alliance Trust was unveiled yesterday, including the ousting of chief executive Katherine Garrett-Cox from the main board and the exit from the company of the chief financial officer (CFO).
The move comes as the Dundee-based trust said it was seeking to cut costs by £6 million a year through a changed corporate structure and operating model.
Garrett‑Cox will remain as chief executive and a director of the group’s Alliance Trust Investments (ATI) business, while CFO Alan Trotter has decided to leave the firm “to seek to continue his career in a publicly listed company elsewhere”.
In addition, Susan Noble is to retire from the main board and become chair of ATI. There will also be a separate board for Alliance Trust Savings.
The parent company came under pressure from activist shareholder Elliott Advisors earlier this year that led to a climbdown by Alliance Trust just before its AGM in April, agreeing to appoint two of the rebel investor’s suggested non-executives to the board.
Alliance Trust said yesterday the latest significant changes were meant to “enhance shareholder value” at what has been criticised as an underperforming wealth manager and after “extensive consultation with a wide range of shareholders”.
A key change in the organisational structure is that the parent board will become fully independent, consisting solely of non-executive directors to assess the performance of ATI under Garrett‑Cox.
Earlier this year, Alliance revealed it had racked up a £3m bill defending itself against Elliott, which has a stake of about 13 per cent in the company.
Karin Forseke, chair of Alliance Trust, said the latest moves “represent some of the biggest changes in our history”.
She said: “In the run-up to our AGM, many of our shareholders indicated that they sought change. We have carefully considered the feedback we received and this is reflected in this announcement.”
The group said that it was introducing the MSCI All Country World Index as a formal benchmark “setting a clear measure against which to assess the Trust’s performance”.
In addition, it is committed to use share buybacks to narrow the discount between the share price and its underlying performance.
Alliance said it would also increasingly focus on global equities and run down its fixed income, legacy mineral rights and property assets, while it only had a small exposure to private equity.
“This simplification of the Trust will give greater clarity to its investment proposition,” the company said. Last week Alliance appointed two new non-executive directors, Chris Samuels, a former boss of Ignis Asset Management, and Karl Sandberg, a founding partner of Oxford Investment Partners.