* Plan to double pace of outperformance against global benchmark
* Alliance Trust Investments sold to Liontrust for 30 mln stg
* Fund managers will move to Liontrust, may be other job losses
* Activist investor Elliott says strategy change "long advocated" (Updates shares, adds Alliance Trust, Elliott comment, analyst)
By Pamela Barbaglia and Carolyn Cohn
LONDON, Dec 15 (Reuters) - Scottish asset manager Alliance Trust announced an overhaul of its strategy on Thursday, including outsourcing its equity portfolio management to a group of external investment managers, propelling its shares to record highs.
The 128-year-old-trust announced the plan following a six-month review, and said it aims to double its pace of outperformance against a global equity benchmark index.
Alliance, one of Britain's largest investment trusts, faced pressure last year from activist investor Elliott Advisors who said it needed a shake-up given the fund's underperformance and the gap between its shares and the value of the assets it holds.
Under the new strategy, Alliance, which has total assets of about 3.6 billion pounds ($4.51 billion), will move from having its internal team manage its equity investments to using eight external managers that will each create a portfolio for the trust of around 20 stocks. Equity investments make up 99 pct of the firm's net assets.
The change in strategy will help Alliance in "providing the shareholders with the return they are looking for," Deputy Chairman Gregor Stewart told Reuters.
The in-house investment team, Alliance Trust Investments, which focuses on sustainable investment strategies, will be sold to Liontrust Asset Management for up to 30 million pounds.
In addition to the Alliance Trust assets, Alliance Trust Investments manages 2.3 billion pounds of assets for external clients.
The team's 17-18 fund managers will move to Liontrust but there may be job losses among Alliance Trust Investments' staff of around 50 in London and Edinburgh, Alliance Trust Chairman Robert Smith told Reuters.
Shares in Alliance Trust were up 2.5 percent at 611 pence at 1306 GMT, one of the top performers in the FTSE 250 index .
A spokeswoman for Elliott, Alliance Trust's largest shareholder with a 17 percent stake, said the move to external asset managers was "an outcome we have long advocated".
However, JPMorgan analysts cut their recommendation to neutral from overweight, citing disappointment with the lack of a tender offer to provide Elliott with an exit from the stock.
Elliott forced Alliance Trust Chief Executive Katherine Garrett-Cox, one of the City of London's most high-profile women in business, to step down from the group's board in October 2015. She also stood down as head of Alliance Trust Investments in March.
In June the trust received an informal merger approach from RIT Capital Partners, the investment trust of financier Jacob Rothschild, which later walked away from the negotiating table saying a deal would not be in the best interests of its investors. ($1 = 0.7980 pounds) (Reporting By Pamela Barbaglia; Editing by Rachel Armstrong and Adrian Croft)