Alliance Trust chief executive Katherine Garrett-Cox emerged from a brutal battle with activist shareholder Elliott Partners in April with a year to turn the company around. She’s not got off to a good start.
The 127-year-old investment trust delivered a 2.7% total shareholder return in the first half of the year, 25th out of a 36-strong global peer group. On a net asset value basis, that figure was 1.4%, placing it an even more dismal 29th.
Garrett-Cox admitted the results were ‘disappointing’, surely an understatement, given her tenuous position. But she argued a hike in bond yields in June was to blame for much of the ‘underperformance’. The trust was now concentrating on shares, she said, adding the FTSE 250 company’s equity portfolio had outperformed the benchmark MSCI All Country World Index since September 2014.
Nonetheless, Garrett-Cox will know excuses won’t fly with Elliott and the other investors it recruited to its cause during the bitter war of words, which ended with two non-executive directors of its choice joining Alliance’s board.
Chair Karin Forseke said the trust was ‘actively engaged in addressing’ shareholder concerns (not deigning to name Elliott specifically), after ‘a particularly challenging period’. More changes, she said, would be announced in the autumn.
The sooner the better. When Garrett-Cox accepted the Veuve Clicquot businesswoman of the year award in May she said leadership was ‘about resilience’. It’s also about making difficult decisions – in this case, for her own survival, as much as the company’s.