NEW YORK, March 21 (Reuters) - ETFS Capital asked shareholders of WisdomTree 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, 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 stock closed at $8.91 on Wednesday.

ETFS Capital, which owns 10% of WisdomTree's 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 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 was not immediately available for comment.

Last year ETFS Capital won a boardroom challenge when investors elected two of its candidates to WisdomTree's board. (Reporting by Svea Herbst-Bayliss; Editing by Muralikumar Anantharaman)