Alliance Trust must up its game to tackle discount, analysts say

Improving returns for shareholders is the only way Alliance Trust will substantially reduce its discount, analysts have warned.

Since activist investor Laxey Partners campaigned for the trust to introduce a discount control mechanism (DCM) earlier this year, the board has bought back almost 40 million shares, narrowing the discount from 17% to 14%. Despite the arbitrageurs losing its long-running feud with Alliance at the group’s AGM, the board has continued buying back shares in an attempt to bring the discount in line with the 8% sector average. The trust revealed in its half-year results last week that it had outperformed, delivering a total shareholder return of 3.1% for the six months to the end of July...