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(Repeats APRIL 22 story. No change to text.)
* Rebel investor has urged review of in-house management
* Investor Elliott has nominated 3 new independent non-execs
* Shareholders due to vote on Elliott nominees on April 29
By Sinead Cruise and Nishant Kumar
LONDON, April 22 (Reuters) - Alliance Trust has noplans to review the in-house management of its 3.6 billionpounds ($5.4 billion) investment portfolio, it said onWednesday, rejecting a key demand of activist shareholderElliott Advisors.
Chairwoman Karin Forseke told Reuters in reply to writtenquestions that the board recognised its responsibility to"challenge all elements" of the British investment company'sbusiness, and said it would reflect on feedback fromshareholders since the rebel investor launched its campaign torevamp Alliance's board on March 16.
But Forseke said the existing internal management model,headed by CEO Katherine Garrett-Cox, "was well placed to executeour strategy and deliver long-term value to our shareholders".
Alliance's board last reviewed the structure of its in-housemanagement in September 2014 before making changes to itsequities team, Forseke said in an email.
Forseke's comments underscore her continuing support for theGarrett-Cox before an April 29 vote on Elliott's campaign to addthree new independent non-executive directors to the trust'sboard.
Elliott, which owns 12 percent of the 127-year old trust,has said the board needs new blood to address "persistentunderperformance" and a dearth of ideas for improving returns,which could include the appointment of an external manager.
Forseke and Garrett-Cox have vigorously rejected Elliott'snominations and criticisms of the trust's costs and performance.They have warned Elliott's plans threatened the very existenceof the FTSE 250 investment firm, which is 65-percent owned by alegion of small 'mom and pop' investors.
"We have regularly asked the company why it persists indefending its current structure without having conducted a fullstrategic review," Elliott said in a March 31 circular thaturged the board to benchmark the cost and flexibility of thetrust's structure against "more successful business models."
Elliott, which declined to comment on Wednesday, has deniedit wants Garrett-Cox to step down.
Tim Ingram, a former Alliance non-executive director, hassaid Elliott's push to outsource management could trigger asignificant pay cut for Garrett-Cox, who has led Alliance'sinvestment strategy since 2007.
"The probability is the board will consider outsourcing andconclude that this does improve shareholder return. Then there'sno role for someone on 1.3 million pounds a year," Ingram toldReuters in an interview on March 31.
Garrett-Cox, one of a handful of top-flight femaleexecutives in Europe, has declined to answer questions on herlonger term future at the trust.
Elliott's complaints about board independence, Garrett-Cox'spay and the strategy to manage assets in-house have resonatedamong shareholders and proxy advisory firms.
At least five investor advisers including ShareSoc, PIRC andTilney Bestinvest have recommended clients elect Elliott'snominees to the trust's board.
The trust dropped out of the FTSE 100 in 2011 and the firm'sown broker JP Morgan Cazenove has described its performance as"lacklustre".
Garrett-Cox earned a pound for every 2,698 pounds of assetsmanaged last year. By comparison, Andrew Bell, CEO of WitanInvestment Trust, one of Alliance's closest peers, earned544,514 pounds -- a pound for every 3,246 pounds in assets.
Alliance has not publicly addressed criticism of Garrett-Cox's remuneration but has pointed to her protection of thefirm's 48-year record of dividend growth.
It has accelerated a search for a new non-executive boardmember and said it would consider any candidates put forward byshareholders.
($1 = 0.6654 pounds) (Editing by Mark Potter)
