Alliance Trust PLC : Update on Proposals

20^th February 2017

Update on Proposals

As announced in May 2016, the Board of Alliance Trust undertook a Strategic Review of the Trust to determine its future direction. The Board worked alongside a number of advisers, principally Canaccord Genuity Limited, as Corporate Broker and Financial Adviser, and Dickson Minto, as legal adviser. It also consulted with a range of shareholders throughout the process.

On 15^th December 2016 the Board announced it had concluded this Strategic Review and set out proposals for a new approach to managing the Trust's equity portfolio. The aim of the new approach is to increase the likelihood of consistently delivering the performance target and to build on the Trust's 49 year track record of increasing dividends.

The Board is proposing that it will appoint Willis Towers Watson (WTW), a leading investment group, to manage the overall equity portfolio, working with eight¹ equity managers, each of whom is rated best-in-class². Each equity manager will typically select 20 stocks³, which will make up the combined portfolio of the Trust. This "best of the best" approach is subject to shareholder approval at a General Meeting on 28^th February 2017.

In advance of that meeting, the Board of Alliance Trust has received questions from the press and shareholders about the role undertaken by WTW during the Company's Strategic Review. The Board has responded to these questions and is happy to share its response more widely.

WTW's participation in the Review was limited to a clearly defined role as an investment consultant. This was to assist the Board, alongside its other advisers, in a review of the Company's investment arrangements, the other options available to the Company and in the evaluation of potential investment managers. Such potential investment managers included all those who put forward proposals to the Trust together with other managers, drawing from WTW's global research views. WTW's involvement ceased once this phase was completed.

Thereafter, and following further shareholder consultation, the Board, supported by Canaccord Genuity Limited, undertook its own analysis of the various potential courses of action to select the investment management structure and approach that would best serve shareholders.

Following the Board's decision to give more detailed consideration to the management of its equity portfolio via a multi-manager model, the Board ran a competitive process to identify a preferred manager of such a model. WTW was subsequently selected to become the investment manager, as announced on 15^th December 2016.

The Board and its advisers believe that any potential conflict of interest for WTW was appropriately managed and that there is no conflict of interest in WTW's proposed appointment by the Board as investment manager to the Company.

The Board considers the approval of each of the Resolutions set out in the notice of the General Meeting, including the adoption of a multi-manager approach to be in the best interests of the Company and its shareholders as a whole. The Board recommends that shareholders vote in favour of all resolutions at the General Meeting.

Notes

 ¹ Initial number of managers selected
 ² As rated by Willis Towers Watson
 ³ One of the managers will also manage an emerging markets portfolio of around 50 stocks

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