View the article online at http://citywire.co.uk/money/article/a886860
Alliance Trust: we need more women!
Chairman of global investment trust that last month sacked former chief executive Katherine Garrett-Cox says board is male dominated.
After a turbulent year for the Dundee-based company, an overhaul of its board has left it with an entirely independent but all-male line-up of directors, quite a change for a company that until recently boasted a female chief executive and chairman.
Lord Robert Smith of Kelvin, the trust’s new chairman (pictured above), who replaced Karin Forseke (pictured below) last autumn, said ‘I am acutely aware of the lack of gender diversity on the current board as a result of the recent changes.
‘Alliance Trust has long been a leader in the area of board diversity, and this is an issue which I am determined to address at the earliest opportunity,’ Smith said.
Four new non execs, all men, have joined Alliance Trust’s board in the past year – Anthony Brooke, Rory Macnamara, Chris Samuel and Karl Sternberg. This followed pressure from Elliott Advisers, the US hedge fund that owns15% of the shares, which has pushed for improvements in shareholder returns and a simplification of the business.
The apparent male takeover of the board was completed when non-exec Susan Noble recently moved across to chair its fund management subsidiary, Alliance Trust Investments (ATI).
This is embarrassing for the 128–year old business which in recent years has attempted to project a progressive image and whose £2.8 billion portfolio is run on an environmentally friendly sustainable investment basis.
Garrett-Cox (pictured), who is due to receive a pay-off of around £1 million after she formally leaves next week, was named business woman of the year by Veuve-Cliquot and was awarded a CBE in the 2014 New Year’s Honours List for services to asset management.
Her services to Alliance Trust shareholders after eight years in charge are still a matter of dispute, however.
Results for 2015 show the company achieved a good investment performance last year and may be on track to improve longer-term returns. A 10.7% total shareholder return beat the 3.8% return from its benchmark, the MSCI All Country World index, and was generated by a 5.4% rise in the net asset value (NAV) of its portfolio and a narrowing in the discount – or gap – to which the shares trade below NAV, helped by a £135 million splurge on buying back its shares in the fourth quarter.
Costs reduced slightly from 0.6% to 0.59% of assets although Alliance Trust did claw back some of the expenses from last year’s febrile annual general meeting, which enraged some shareholders. The cost of holding the meeting came in at £2.4 million rather than the £3 million it initially estimated.
However, the wisdom of the trust owning ATI and its fund supermarket, Alliance Trust Savings, remains open to question.
ATI suffered a 19% fall in its valuation to £19.8 million, despite reducing losses to £2.1 million from £3.2 million on the back of slightly higher revenues and reduced costs. Third party funds under management rose 9% to £2.1 billion.
Alliance Trust said it had been appropriate to reduce the value of ATI during a ‘transitional period’ for the business, which had seen Garrett-Cox step down from the main board to focus on leading the fund management company before her removal last month.
There was mixed news from Alliance Trust Savings too. An external review hiked ATS’ value 71% to £54 million although the company did invest £37.1 million in the business to fund the acquisition of Stocktrade from Brewin Dolphin and to boost regulatory capital.
Losses rose to £5.2 million from £3.9 million as a result of expenditure on new technology and the costs of restructuring the board. Revenues improved less than expected to £13.7 million from £12.8 million although assets under administration jumped 32% to £8.5 billion and customer account numbers lifted 18% to 84,746.
The company declared its 49th year of consecutive dividend rises with a fourth dividend of 3.3725p taking the total for the year to 12.43p per share, up 0.4% on 2014. This includes the special dividend of 1.46326p paid in December.
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In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
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