Garrett-Cox and the rest of the board have been under significant pressure and scrutiny this year as activist American investor Elliott Associates has built up a stake in the trust and lead calls for a shake-up at the top.
The US firm recently upped its stake from 12% to 14%, indicating it was in no mood to back down.
While Garrett-Cox will no longer be chief executive of the chief executive of the parent company she remains chief executive of the investment arm, Alliance Trust Investments.
The move is part of changes in governance which Alliance Trust says will improve the independence, focus and accountability of the board.
‘The changes announced by Alliance Trust look positive on paper, but the proof of the pudding will be in the eating. Long-term investors could either view this as a clean slate, or as a return to square one,” said Hargreaves Lansdown senior analyst Laith Khalaf.
“There has been little continuity in the trust’s investment strategy in recent years. Ilario di Bon was appointed Head of Equities to reinvigorate performance in 2011 but was subsequently replaced by Peter Michaelis, with a renewed focus on Socially Responsible Investing, in 2014.”
“The elephant in the room is still of course activist investors Elliott Advisors, which owns a significant minority stake in Alliance Trust,” Khalaf continued. “Elliott may well be placated by these recent changes. In any case it has agreed not to agitate against Alliance Trust until the next AGM, which is scheduled for May 2016. At this point the gloves come off, and who knows if Elliott will start swinging again.”
