Martin Flanagan: No more same old at Alliance Trust

IF IT is evolution rather than revolution going on at Dundee‑based Alliance Trust it is evolution at the gallop, with the jockey’s silks billowing in the wind. Last spring the board was standing firm against activist shareholder Elliott Advisors, the hedge fund vociferously complaining about the wealth manager’s under-performance and demanding corporate governance change.

Columnist Martin Flanagan. Picture: Fiona Hanson

At first Alliance Trust rejected Elliott’s attempts to install three of its nominated non-executive directors on the board.

After cross words, and on the eve of the AGM, a peace of sorts broke out and two of Elliott’s nominees joined the board. The behind-doors deal forestalled embarrassment at the AGM, and both sides agreed “mutual non-disparagement undertakings”, which translated as not criticising each other in public. Elliott also promised not to call a general meeting or publicly agitate against the firm until after next year’s meeting.

But it has clearly not needed to agitate publicly. Apart from getting its nominees in place, Alliance appointed another two non-executives last week.

And the company trumped it all yesterday with a boardroom shake-up. Chief executive Katherine Garrett‑Cox has stepped down from the main board, chief financial officer Alan Trotter is quitting the company, and Susan Noble, one of the leading non-executive directors, has also stepped down from the main board.

Garrett‑Cox and Noble become chief executive and chair respectively of the Alliance Trust Investments (ATI) business, while the main board will be peopled entirely by non-executives monitoring and holding to account the operating side of the organisation. About £6m of costsavings have been targeted at the group, about 20 per cent of the overhead base, and share buybacks look on the cards. One thing’s for sure. At Alliance Trust it is not a case of plus ca change…

M&As a law unto themselves

It is curious that merger & acquisition activity is taking off again according to all the data. This despite the slowdown in China and other emerging markets, the Greek mish-mash in the eurozone, uncertainty about the Fed’s timing of any interest rate rise, and significant geo‑political uncertainty typified by the hall of crazy fairground mirrors that is Syria.

Perhaps, M&A‑wise, fortune favours the blithe.