* Plan to double pace of outperformance against globalbenchmark
* Alliance Trust Investments sold to Liontrust for 30 mlnstg
* Fund managers will move to Liontrust, may be other joblosses
* Activist investor Elliott says strategy change "longadvocated" (Updates shares, adds Alliance Trust, Elliott comment, analyst)
By Pamela Barbaglia and Carolyn Cohn
LONDON, Dec 15 (Reuters) - Scottish asset manager AllianceTrust announced an overhaul of its strategy onThursday, including outsourcing its equity portfolio managementto a group of external investment managers, propelling itsshares to record highs.
The 128-year-old-trust announced the plan following asix-month review, and said it aims to double its pace ofoutperformance against a global equity benchmark index.
Alliance, one of Britain's largest investment trusts, facedpressure last year from activist investor Elliott Advisors whosaid it needed a shake-up given the fund's underperformance andthe gap between its shares and the value of the assets it holds.
Under the new strategy, Alliance, which has total assets ofabout 3.6 billion pounds ($4.51 billion), will move from havingits internal team manage its equity investments to using eightexternal managers that will each create a portfolio for thetrust of around 20 stocks. Equity investments make up 99 pct ofthe firm's net assets.
The change in strategy will help Alliance in "providing theshareholders with the return they are looking for," DeputyChairman Gregor Stewart told Reuters.
The in-house investment team, Alliance Trust Investments,which focuses on sustainable investment strategies, will be soldto Liontrust Asset Management for up to 30 million pounds.
In addition to the Alliance Trust assets, Alliance TrustInvestments manages 2.3 billion pounds of assets for externalclients.
The team's 17-18 fund managers will move to Liontrust butthere may be job losses among Alliance Trust Investments' staffof around 50 in London and Edinburgh, Alliance Trust ChairmanRobert Smith told Reuters.
Shares in Alliance Trust were up 2.5 percent at 611 pence at1306 GMT, one of the top performers in the FTSE 250 index.
A spokeswoman for Elliott, Alliance Trust's largestshareholder with a 17 percent stake, said the move to externalasset managers was "an outcome we have long advocated".
However, JPMorgan analysts cut their recommendation toneutral from overweight, citing disappointment with the lack ofa tender offer to provide Elliott with an exit from the stock.
Elliott forced Alliance Trust Chief Executive KatherineGarrett-Cox, one of the City of London's most high-profile womenin business, to step down from the group's board in October2015. She also stood down as head of Alliance Trust Investmentsin March.
In June the trust received an informal merger approach fromRIT Capital Partners, the investment trust of financier JacobRothschild, which later walked away from the negotiating tablesaying a deal would not be in the best interests of itsinvestors. ($1 = 0.7980 pounds) (Reporting By Pamela Barbaglia; Editing by Rachel Armstrong andAdrian Croft)
