Alliance Trust has reached an agreement with its biggest shareholder Elliott Advisors, a US-based hedge fund group, to avoid showdown over board appointments.

The battle between the two firms started following Elliott’s bid to appoint three independent non-executive directors to the board of Alliance Trust on 16 March 2015, to which the investment trust was strongly opposed.

With the three non-executives set to be voted on at Alliance Trust’s annual general meeting, the trust has agreed to appoint two of Elliott Advisors’ proposed candidates reaching a compromise deal.

Under the agreement, Alliance will appoint Anthony Brooke, a former SG Warburg executive, and former Morgan Grenfell corporate financier Rory Macnamara to its board of directors while former Legal & General chief executive Peter Chambers, the third candidate proposed by Elliott Advisors, will not join the board.

Alliance Trust chair Karin Forseke said: “On behalf of the whole board, I would like to express my gratitude to our shareholders for engaging with us on this important issue. Having considered this feedback we have worked with Elliott to find a compromise which we believe is in the best interests of all our shareholders.

“I would also like to welcome Anthony and Rory to the board where their significant experience will be a considerable asset.”

Alliance Trust will bring in a third independent non-director of its choice.