Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a579807
Alliance fights back as Aberdeen looks to oust Garrett-Cox
by Dylan Lobo on Apr 03, 2012 at 07:52
Alliance Trust says Laxey's latest attack on the investment trust is simply motivated by ‘its own short-term interest' amid reports Aberdeen Asset Management is looking to oust its chief Katherine Garrett-Cox (pictured).
According to a report in the Telegraph, Aberdeen is expected to contact the trust’s board with its proposals. The firm’s chief, Martin Gilbert, is reported to have said: ‘Aberdeen would love the opportunity, if the board ever did put it out to tender, to pitch for the trust.
'If we [Aberdeen] were given the opportunity, we would run Alliance with our other global portfolios out of our Edinburgh office.’
The news comes after Laxey, run by Colin Kingsnorth, requisitioned the £2.1 billion trust’s board with a fresh set of demands, including the consideration of outsourcing its fund management and a narrowing of the discount. The activist also wanted shareholders to be allowed to exit the trust closer to net asset value.
The move comes roughly a year after Alliance shareholders voted against Laxey’s proposals to introduce a strict share buyback policy on the trust.
Alliance Trust said there were five major flaws in Laxey’s latest attack. It claimed:
* Laxey's proposals will not benefit shareholders over the medium and long-term and are motivated by its own short-term self-interest
* The proposal to allow shareholders to exit the company at closer to net asset value is similar to that which shareholders convincingly rejected at last year's annual general meeting (AGM) and would have a similarly detrimental effect
* The board is already committed to narrowing the discount through improving investment performance, ongoing share buybacks and a continuing emphasis on sustainable dividend growth
* Externalising the investment management of the portfolio would negatively impact the company's ability to align the interests of its shareholders and investment managers
News sponsored by:
Subscribe to Wealth Manager magazine and rack up CPD points
Citywire Wealth Manager has partnered with CISI to enrich the experience of subscribers to our magazine.
Today's top headlines
More about this:
Look up the shares
Look up the investment trusts
More from us
What others are saying
Aberdeen Live supplement: Fundamentals point to ongoing flows and solid returns from EMD
After a record year for inflows and market-leading performance in 2012, emerging market debt has taken a large step towards the mainstream. Our recent debate covers the outlook for the asset class this year and where opportunities can be found.
On the road
J.P. Morgan Elect on investment growth, income and cash. More information on J.P. Morgan investment trusts.