RM Funds, the 4.8% shareholder in Gore Street Energy Storage (GSF) that tapped into investor discontent over the investment trust last year, has signalled its intention to back Saba Capital in voting for the fund’s discontinuation next month.

Pietro Nicholls, the VT RM Alternative Income fund manager who led RM Funds’ campaign for better governance and transparency, said the annual results in July had been discouraging with a 27% slump in net asset value and a fall in revenue and earnings despite a substantial increase in capacity.

“Shareholders have therefore endured more capital destruction while the investment manager appears, yet once again, to have avoided any meaningful financial consequence,” Nicholls wrote on Substack.

“Now it is Saba’s turn,” he said of the activist hedge fund which has built a 17% stake and has had two resolutions on continuation and a wind-up accepted for the annual general meeting on 16 September.

Nicholls said RM Funds had been accused of trying to sell the company on the cheap when it urged the former GSF board to seek a merger or acquirer last year. Although the real assets investor failed to get two new directors elected to the board it succeeded in highlighting a high level of shareholder discontent that led to all the directors being replaced with the company agreeing to pay a fixed 7p per share dividend backed by asset disposals and upgrades to operational battery projects.

He acknowledged that Saba divided opinion after its hostile battles for control at Edinburgh Worldwide and Impax Environmental Markets and predicted that GSF would spend a small fortune fighting the “big, bad” activist “rather than confronting what is directly in front of it”.

“Whilst the advisers will have a field day fighting this one, the frustration is palpable and we might be finally in the end game,” said Nicholls, who told Citywire that RM Funds would vote for the trust’s closure.

“It’s just not being well managed and we’re very fed up with it. We think enough is enough now,” he added.

GSF has recommended shareholders vote against Saba’s resolutions and promised to publish a “comprehensive” defence of its recovery strategy. However, with nearly 22% of the shares held by the US firm and RM Funds it will have a challenge to rally enough shareholders to its cause. The ordinary resolution stating the company should not continue requires 50% of votes to pass and the special resolution, calling for wind-up proposals should the first resolution pass, requires 75% of votes.

QuotedData’s James Carthew yesterday argued the company should be given more time as a liquidation was unlikely to benefit shareholders who have seen their stakes fall by more than a third in the past three years.

Stay a step ahead. Our daily newsletter brings you the latest on investment trusts and active ETFs. Subscribe here.