Katherine the Great loses her throne after bitter war with activists

Katherine Garrett-Cox has been made redundant from Alliance Trust. But will the Veuve Cliquot Business Woman of the Year be vindicated in her fight against activist investors?


Will Katherine Garrett-Cox be vindicated?

Bad news for compilers of City superwomen lists there's now one fewer in the fold, says Citywire. Katherine Garrett-Cox, "one of a small band of women to make it to the top of fund management", has been made redundant from Alliance Trust, after her position as chief executive of its fund-management business was abolished.

"Katherine the Great's" ignominious departure from the Dundee-based group follows a torrid year, which saw her lose a bitter war against the New York activist investor, Elliott Advisors. Her position has looked vulnerable since October when she was ousted as overall head of the 128-year-old investment trust.

Analysts said Garrett-Cox's exit gives Alliance Trust "a clean slate" on which to build the new strategy it promised as part of the ceasefire with Elliott last year, says The Daily Telegraph. Investors will be hoping for an end to the trust's "middling performance" (see below). But it is a sizeable personal blow for a woman once talked up as a leading light in British finance. Only last autumn, she was voted Veuve Clicquot Business Woman of the Year. Even a pay-off worth at least £1.4m, and potentially more, is unlikely to soften that kind of hard landing.

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Garrett-Cox, 48, a history graduate from Durham University and keen pianist, has sometimes claimed that she got into fund management almost by accident. "I was musical, I wanted to go into acting. But I do think you can do anything if you put your mind to it." In the event, she "made a name for herself as a female stockpicker in a man's world" at Hill Samuel during the American boom of the 1990s, says the London Evening Standard.

She later joined Aberdeen Asset Management as chief investment officer neatly "dodging" the split-cap investment trust scandal, before taking up a similar role at Morley Fund Management, the investment arm of insurer Aviva. It was there that she gained the "Great" tag a soubriquet that she finds "toe-curlingly awful". "My living fear is that someone might actually think that is how I think about myself It implies I don't think teams matter" and they do.

When Garrett-Cox, by now a mother of four, headed to Dundee, the city of "jute, jam and journalism" in 2007, it was thought she had taken "her foot off the gas" and was after a quieter life. It proved anything but. Her efforts to turn around the "sleepy investment trust" were hampered by the financial crisis, then by a bruising battle with an activist investor, Laxey Partners, in 2010. The latter sought to appoint external fund managers to oversee Alliance's portfolio.

Garrett-Cox saw them off. Five years later, she would find Elliott a more persistent challenger. "I haven't met a single successful business leader who hasn't had a setback," Garrett-Cox observed in May. "It's about how quickly you jump back in and how you deal with it." Her prowess in that department is about to be tested.

The curse of Veuve Clicquot strikes again

But was Garrett-Cox's performance at Alliance Trust really so bad? asks James Quinn in The Daily Telegraph. Elliott's main bugbears were the management of the trust and the discount to net asset value of its shares. Under her watch, Alliance was demoted from the FTSE 100 to the FTSE 250 "hardly a badge of honour".

But cut the figures another way "and it could be argued that Garrett-Cox made the best of a bad lot". During her time as CEO, Alliance Trust delivered 73.6% in terms of total shareholder return against 32.7% for the FTSE 100 and 41.5% for the FTSE All share. "Numbers aside, it could be argued that, as a result of the City superwoman' moniker, she was always set up for a fall."

It looks like the "curse" of Veuve Clicquot has struck again, says Laura Chesters in the Daily Mail. Garrett-Cox joins a growing list of eminent women who have suffered major career setbacks after winning the prize, including former Thomas Cook boss, Harriet Green, who won in 2014.

Yet how this episode in Garrett-Cox's career will be remembered largely depends on Alliance Trust's performance over the next few years, says Adam Gale in Management Today. If it starts doing better, Elliott's intervention will have been vindicated. But if it continues to underperform peers, Garrett-Cox may come to be seen as a "leader who just fell victim to outside interference".