Activist US investor Elliott ups exposure to Alliance Trust

By Jemima Kelly

LONDON, Feb 27 (Reuters) - U.S. activist investor Elliott Management Corp has increased its exposure to Scotland-based investment firm Alliance Trust Plc to more than 10 percent, a stock market filing showed.

The filing on Wednesday showed the hedge fund had increased its direct ownership of shares in Alliance Trust to just over 5 percent from just under 5 percent. It also holds contracts for difference, or CFDs - a type of derivative - in Alliance Trust amounting to just over 5 percent.

Elliott has also bought into another UK asset manager F&C Asset Management via derivatives contracts, giving it the equivalent of about an 11 percent stake.

The hedge fund recently took a big stake in Morrisons and is pushing the British supermarket chain to sell off some of its property assets. Elliott was also active in U.S. drugs company McKesson (Frankfurt: MCK.F - news) 's takeover of Celesio (Other OTC: CAKFF - news) .

Elliott will only have voting rights of just over 5 percent in Alliance Trust unless the firm has instructed the owner of the CFDs to vote on its behalf, a source familiar with the matter told Reuters.

Alliance Trust is engaged in constructive conversations with Elliott, as it is with all its shareholders, the source said.

Katherine Garrett-Cox, chief executive of Alliance Trust, was not available for comment because the company is in a closed period ahead of publishing its annual results next Friday.

New-York based Elliott was not immediately available for comment.