NEW YORK, March 21 (Reuters) - ETFS Capital asked

shareholders of WisdomTree ( WT ) to abstain from re-electing

some board members of the U.S. asset manager, saying its stock

could surge at least 70% if it were run better, according to a

letter seen by Reuters.

The London-based investment firm is ratcheting up pressure

on New York-based WisdomTree ( WT ), valued at $1.4 billion, after the

company last month rejected ETFS Capital's suggestion to

consider strategic alternatives, including possibly selling

parts or all of the asset manager.

"The intrinsic value is $15.50 per share," ETFS Capital's

chairman Graham Tuckwell wrote in the March 21 letter, adding

the value gap exists even after the stock price already surged

32% since the start of the year. WisdomTree's ( WT ) stock closed at

$8.91 on Wednesday.

ETFS Capital, which owns 10% of WisdomTree's ( WT ) outstanding

shares, criticized how the company allocates capital, its high

costs and that it attempted to evolve from an exchange traded

funds business into decentralized finance, or DeFi, relying on

blockchain technology.

For months the firm tried to engage privately with

WisdomTree ( WT ) and in February it proposed the board hire an

investment bank to review alternatives, return capital to

shareholders and replace certain executives, the letter said.

The company last month responded to ETFS Capital's private

letter with a public statement in which it rejected the

suggestions.

Now ETFS Capital is appealing to shareholders to support a

"withhold campaign" where they abstain from voting for board

members who are running unopposed for re-election.

"As a referendum on the company's failed diversification

strategy and its refusal to unlock value through a strategic

review process, we intend to withhold our votes from members of

the board at the upcoming shareholder meeting. We invite other

shareholders to do the same," the letter said.

WisdomTree ( WT ) was not immediately available for comment.

Last year ETFS Capital won a boardroom challenge when

investors elected two of its candidates to WisdomTree's ( WT ) board.

(Reporting by Svea Herbst-Bayliss; Editing by Muralikumar

Anantharaman)