Alliance Trust steps up search for independent non-exec

(Adds details on performance, quotes)

By Sinead Cruise and Aashika Jain

April 14 (Reuters) - Alliance Trust is speeding up the search for a new independent non-executive director and will consider any candidates put forward by shareholders, it said on Tuesday, in a move that could head off a more radical board shake-up proposed by a rebel investor.

Elliott Advisors, which has made a string of criticisms of 127-year-old British investment company, has called on it to appoint three new independent directors, with shareholders due to vote on its nominations on April 29.

Alliance Trust, which fears Elliott's nominees would not be truly independent, said it had appointed headhunters Russell Reynolds to search for a new non-executive.

It said it had always planned to refresh its board in the summer, and a source familiar with the matter said the decision to speed up the search was not a concession to Elliott.

"I wouldn't call this a change of heart, we are moving forward with what we said we would always do," the source said. "We are doing this for all shareholders."

Elliott, the largest single investor Alliance Trust with a 12 percent stake, has questioned its performance, costs and dividend policy -- criticisms vigorously rejected by the trust.

Shareholder advisory firm PIRC, which advises institutional investors with assets in excess of 1.5 trillion pounds, has advised Alliance shareholders to vote in favour of all three of Elliott's nominations.

Elliott declined to comment.

PERFORMANCE

Alliance reiterated its focus on generating real returns for shareholders over the medium to long term through both capital growth and the payment of dividends.

The trust said it remained convinced the investment process and its portfolio were well positioned to deliver shareholders' expectations.

Total (Swiss: FP.SW - news) shareholder return (TSR (NasdaqCM: TSRI - news) ) for the first quarter ended March 31 was 6.9 percent, while the net asset value total return was 7.9 percent, which are both now ranked in the top or second quartile of the global sector peer group over one year, it said.

Alliance reported a 5-year annualised TSR to March 31 of 11 percent, ahead of the 9.9 percent median for its peers.

Its investment unit ended the first quarter with over 2 billion pounds of third party assets under management, while the trust's savings division's assets under administration reached 7 billion pounds in March, it said.

The trust's shares were flat at 527.7 pence at 0905 GMT. (Reporting by Aashika Jain in Bengaluru and Sinead Cruise in London Editing by Simon Jessop and Mark Potter)