Pirc opposes outsourcing of £2.1bn Alliance Trust

PIRC, the shareholder adviser, has come out in support of the beleaguered Alliance Trust board and opposed a resolution put forward by activists that it should outsource the management of its £2.1 billion fund.

But Pirc’s advice to shareholders published yesterday fell short of a ringing endorsement for the current board, led by chief executive Katherine Garrett-Cox. It said that it “doesn’t believe that a change can only be brought about by externalising the management of the trust”. But it added that it agreed with Laxey Partners’ criticism that remuneration “should be addressed”.

Pirc, which also advises shareholders to oppose the trust’s “excessive” remuneration report at its AGM this month, said that the trust should implement a remuneration structure based on a flat fee.

That, along with a performance fee with a “high water mark” was also a “viable option” for the board, rather than outsourcing management.

Pirc is one of the few organisations that have opposed outright Laxey’s call for the trust to hand over management of its fund to an outside firm. Other groups representing shareholders such as Speirs & Jeffrey and Brewin Dolphin have signalled support for a potential change of management.

Martin Gilbert, the chief executive of rival Aberdeen Asset Management, has thrown his hat into the ring to take over the running of the trust.