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Alliance to get a global investment team after shake-up

Kathryn Garrett-Cox, boss of the poorly performing Alliance investment trust, has decided the global fund needs a global investment team.

 
Alliance to get a global investment team after shake-up

Kathryn Garrett-Cox, boss of the poorly performing Alliance investment trust, has reorganised the global fund to give it a global investment team.

Four teams investing in shares in different regions of the world will be combined in one global team led by Ilario Di Bon, who takes on a new role as head of equities. He will report to Garrett-Cox, who is chief investment officer as well as chief executive.

Garrett-Cox said the move would give the £2 billion trust 'a more focused and efficient investment structure'. Alliance's long-term performance has been poor, with the share price returning 70% over 10 years compared to the 99% average from global growth investment trusts.

Alliance also announced it would close three out of seven funds in its Alliance Trust Investments (ATI) range. The unit trusts being shed are UK Equity Income , Asia-Pacific Equity and Japan Equity . Subsidiaries such as ATI and its Savings investment platform business have come under fire from some shareholders who argue Alliance should stick to its core business.

Earlier this year Alliance's board fended off a second attempt by activist investor Laxey Partners to do more to improve shareholder returns. The trust's shares currently trade at a 16% discount to the net asset value of its investments.

Alliance declined to comment on how many jobs would be lost from the changes.

8 comments so far. Why not have your say?

Aled Jones

Jul 06, 2012 at 19:58

The Senior staff at Dundee have tried to do too much in too short a time. It is true that the Alliance Trust has advanced from its mediaeval torpor inot the modern world in the last ten years, but remember that Kathryn ( who made her reputation as a very successful Fund manager elsewhere) was first appointed as Chief Investment Officer by the previous CEO. After the previous CEO left, Kathryn was appointed the new CEO which initially entailed being the Chief iinvestment Officer as well as being responsible for overseeing the modernisiation of ATS and the new funds and reversing some of th e mistaken changes introduced by the previous CEO.

I suggest this work load was too much for Kathryn and she was distracted from her primary role as Chief Investment Officer and miraculous stock picker. I see that the AT board realised that Kathryn could not do every thing and have now appointed a new Chief investment Officer for the Alliance Trust.

Perhaps, with a new fulltime ATglobal Investment Officer , lightly supervised by Kathryn, this large 2 billion Investment Trust will start to move up the league table of global investment trusts. However, if Mr Di Bon is only an average, or worse, a poor global investment officer then the Alliance Trust willl not progress and the Laxey Fund managers of this world will return with more harrassment to the Aliance Trust.

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Wills yma

Jul 06, 2012 at 20:59

If Laxey et al are unhappy with Alliance Trust why don't they vote with their feet and go somewhere else?

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Wills yma

Jul 06, 2012 at 21:01

If Laxey et al are unhappy with Alliance, why don't they vote with their feet and go somewhere else?

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john_r

Jul 07, 2012 at 00:23

Seems to me that after being 5 years in the job Ms Fox hasn't any key performance issues to be proud of - certainly to the benefit of shareholders. Importantly the share price still languishes lower than it was 5 years ago and investors annual charges continue to increase.

The only other upward movements I can recall are the extravagant salaries and bonuses paid to managers for their seemingly inept performance.

My own view is that if you are still invested in Alliance Trust IT then I would suggest you give serious thought to Laxey proposals if they do come around again. The alternative is to believe the new investment manager under Cox will perform where others have failed - but in so doing you could risk another five years of mediocrity.

Perhaps Alliance Trusts problems are more systemic ......

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Rory

Jul 08, 2012 at 06:38

In recent years, the basic Brown-Paper Wrapper Alliance Trust with what oncw was the best savings scheme available has been turned into a boutique manager with pricey execs and eyewatering charges to match, provoking an exodus of longtime customers. Perhaps the phrase 'Discount Broker' is an unfamiliar refrain in Dundee.

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peter montgomery

Jul 08, 2012 at 18:36

This move smacks of desperation;if thats the best Ms Cox can do to get some performance out of her patient in the sick bay,then the Board should heed Laxeys advice and outsource the management.I give this latest wheeze to buy time 12 months at best;by then even the doziest private client broker will be advising clients to vote for change either via Laxeys proposals or a bid from Murray Intl. using shares valued,rightly,at a premium to NAV. Come on Bruce(Stout) ,time to wade in!!

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martin hargan

Jul 09, 2012 at 11:12

so many reliable affordable competitors new and old without these antics.So many dependable commentators and journals who give investment trusts a good name.

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No name 2

Jul 14, 2012 at 15:01

I agree with the general tone of the comments. Since K G-C became CEO, the Alliance Trust's performance has at best been average whilst it's TER seems to have more than doubled. The performance of the newish OEIC's (why are we mixing OEICs and ITs ?) has hardly been exciting , additional charges have been introduced, and it's not clear to me what it's all about. Hardly a track record to justify a very large salary and, in particular, huge bonus.

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