Investors appear lukewarm on Alliance restructure

It is four months on from the AGM showdown between Alliance Trust and Laxey Partners  and the trust's shareholder register appears to have suffered a sharp contraction in the aftermath.  

Performance on the £2.4 billion global fund has continued to languish despite a pledge by its head, Katherine Garrett-Cox, to boost the vehicle's returns following the attack spearheaded by Colin Kingsnorth earlier this year.  

While the FTSE World eked a 1.55% rise in the year to the end of August in the face of significant market  turmoil, the net asset value (NAV) per share of Alliance Trust has shrunk by 0.66%. The graph below highlights how the trust has fared over the last 12 months.

Alliance has bought back close to 40 million shares during the volatility, which is estimated to have added roughly 1% to its top line performance, so the underperformance is a little more questionable.

The trust's discount is trading within the 13%-14% range, making it still one of the widest in the global growth sector, beaten only by Brunner Investment Trust (-17%) and Caledonia (-20.7%).

So what's gone wrong?  Hopefully Alliance Trust's chief executive Garrett-Cox (pictured) will be able to shed some light on this when the trust delivers its interim results to investors on Monday. 

Presumably, the bulk of its underperformance stems from stock selection given the vehicle's allocation looks roughly in line with its peers. The vehicle has also trimmed back on private equity, a decision which may have cost it dear, however, given signs that sentiment towards this asset class is turning.

The shareholder register for Alliance already looks remarkably different (and sparser) than it did in the run-up to its AGM. Wealth Manager heard, at the time, from a number of private client managers they were either in the process of, or were planning to trim back their stake.

A sweep of the shareholder register dated on 27 August yesterday evening threw up a few noticeable absentees. Where have Brewins, Charles Stanley and Laxey gone?