Fund managers under attack from hyper-activist investor Elliott Management
US ACTIVIST investor Elliott Management flexed its muscles yesterday by taking large stakes in two of Britain’s most prominent fund management groups.
The group took its shareholding in F&C Asset Management to 11 per cent while building its ownership of Alliance Trust to 10 per cent.
The move will unnerve both companies given Elliott’s aggressive reputation for demanding widescale changes at the companies it owns.
It recently took a large stake in supermarket Wm Morrison and is pushing for the business to hive off its property assets. Earlier this year it also forced pharma firm McKesson to increase its takeover price for rival Celesio.
F&C is currently in the midst of a takeover by Canadian financial giant BMO and analysts last night said Elliott’s move could be designed to increase the price.
“It looks like merger arbitrage from them,” Canaccord Genuity analyst Arun Melmane said. “There was a feeling the take out price wasn’t knock out.”
Alliance Trust is set to meet with Elliott after it publishes results a week on Friday, in line with its policy of meeting all major shareholders.
Numis analyst Charles Cade said Elliott’s presence would put more pressure on Alliance to improve its performance and narrow its discount.
“We would not be surprised if its buyback programme became more active once again or if Elliott tried to exit through a tender offer,” he said.