By Nishant Kumar and Sinead Cruise
LONDON (Reuters) - Activist investor Elliott Advisors, the largest individual shareholder in Alliance Trust <ATST.L>, is seeking support from fellow shareholders for a boardroom shake-up at one of Britain's oldest listed investment companies.
Elliott, which owns 12 percent of the investment trust, said in a statement it has nominated three new independent non-executive directors ahead of the company's annual general meeting on April 29.
"This initiative is the culmination of a process where we had sought to engage with the company on matters of corporate governance and business concern, but where we have not been met with any meaningful response," Elliott said.
The U.S. investment firm, which is Argentina's main hold-out creditor and is also famous for agitating for change at various companies in the past, including Actelion <ATLN.VX>, Telecom Italia <TLIT.MI> and Hess <HES.N>.
Elliott said its key concerns included a "persistent underperformance" of Alliance Trust's investment portfolio against peers and relevant benchmarks, the costs of its investment management function and continued losses in its two operating subsidiaries.
Alliance Trust, founded 126 years ago and based in Dundee, Scotland, is structured as an investment trust, a listed company running a global portfolio of investments. As a result, the company's shares are prone to trading at a discount to the net asset value of its investments.
Elliott believes poor corporate governance and weak cost controls are largely to blame for a relatively wide discount of around 12 percent to its net asset value of some 3.2 billion pounds ($4.7 billion), according to the company's latest data.
The shares were trading up 1.7 percent at 504.5 pence by 1053 GMT on Monday.
In reaction to Elliott's statement a spokesman for Alliance Trust said it had "strong corporate governance controls in place and an effective and committed board of directors" who remained "entirely focused" on acting in the best interests of shareholders over the long term.
GOVERNANCE
Elliott, which became a shareholder in 2010, has objected to the replacement of the Trust's head of equities with an internal candidate, a source involved in Elliott's campaign said.
The firm has nominated Anthony Brooke, a former S.G Warburg executive, Peter Chambers, former chief executive of Legal & General Investment Management and asset management consultant Rory Macnamara as new directors, "to safeguard future communications with investors".