Dundee-based fund manager Alliance Trust reported a poor first-half performance in a period marked by shareholder unrest.
The investment house that spent £3 million fighting rebel shareholder Elliott Advisors’ bid for boardroom change delivered returns of 2.7% to shareholders, almost half that of rival fund managers.
The performance for six months to June 30 is unlikely to quell criticism of the management of AT.
The savings arm’s assets under administration rose 12% to £7.2 billion but the business made an operating loss of £0.2m. Elliott had pressed for three new directors to change AT’s investment strategy and boost performance.
An 11th hour agreement ahead of the annual meeting in June saw two Elliott nominees become directors in return for a truce for at least a year.
In the first test of performance since the unrest, AT reported a Net Asset Value of 1.4% and total shareholder return of 2.7%.
Disappointing portfolio returns had been adversely affected by weakness in some income holdings.
AT had continued to reduce the number of equity portfolio holdings to 68 positions, compared to 88 a year ago.
Chairwoman Karin Forseke said the first half of 2015 was particularly challenging.
The board was actively engaged in addressing the concerns raised, she said, and anticipated announcing changes in the autumn.
Chief executive Katherine Garrett-Cox admitted AT had underperformed a number of its peers.
She continued: “Much of the underperformance occurred in June when the sharp rise in bond yields affected the return.”
Since the equity team took over responsibility for the portfolio in September last year, the equity portfolio had outperformed the world common benchmark for stock funds.
The NAV return was now in line with the peer group sector average.
She added: “Our objective is to maximise shareholder value by delivering a combination of long-term capital growth and a consistently rising dividend.”
Shares closed up 0.24% at 495p.