Katherine Garrett-Cox ousted from Alliance Trust

Katherine Garrett-Cox, one of the City's most prominent women, is to leave Dundee-based Alliance Trust next month after her role was made redundant in the wake of a battle with an activist investor.

Katherine Garrett-Cox will leave Alliance Trust Investments next month. Picture: Jane Barlow

Analysts said the departure of Garrett-Cox as chief executive of its fund management arm Alliance Trust Investments (ATI) came as no surprise following her ousting from the firm’s main board in October after pressure from US hedge fund Elliott Advisors.

Garrett-Cox – once nicknamed Katherine the Great for her reputation in financial circles – was paid £1.4 million last year and is likely to receive up to a year’s salary as compensation for loss of office. The firm said the move follows “discussions” between Garrett-Cox and the board of ATI, owned by wealth manager Alliance Trust, about the “future requirement for the chief executive role”.

Analysts at Winterflood Securities said that it was “perhaps not surprising” that she was leaving the group after being “a major focal point in events surrounding Alliance Trust in recent times”.

Laith Khalaf of Hargreaves Lansdown described the departure as the “end of an era” for Alliance and evidence that the fallout from the battle with Elliott was still being seen.

Garrett-Cox joined Alliance Trust as chief investment officer in 2007 and was promoted to chief executive the following year. However, a boardroom shake-up in October saw Garrett-Cox ousted from the main board of Alliance Trust as it sought to cut costs through a changed corporate structure and operating model but she remained as chief executive and a director of its ATI business.

Alliance Trust came under pressure from Elliott last year, leading to a climbdown just before its annual meeting that saw it agree to appoint two of the rebel investor’s suggested non-executives to the board.

Lord Smith of Kelvin, who was last month named as the group’s new chairman, said it was clear that the role of chief executive of ATI had “changed significantly” as the company looked to implement changes but said the board wished Garrett-Cox “every success in the future”.

Garrett-Cox said she was “very proud of the significant achievements that my team has delivered over the past nine years”.

“I leave ATI with a strong team who are already delivering improved investment returns and driving down costs,” she said.

Responsibilities of her role will be “reassigned” while ATI’s team of investment professionals continue to manage some £5 billion of funds.

Operational responsibilities will be passed to ATI managing director Ramsay Urquhart.

Numis Securities said Alliance Trust was now an “each way bet” for investors, noting: “Either performance is good or the board will come under growing pressure to take more radical action.”