GCP Asset Backed Income (GABI ), the £395m debt portfolio run by Gravis, is to wind down and return capital to shareholders after a majority stated that was their preferred option for a fund blighted by problem loans and whose shares have traded well below net asset value for 18 months.

Shares in the eight-and-a-half-year-old investment company rose 2.4%, or 1.6p, to 68.8p yesterday, narrowing their 26% discount, after its board recommended shareholders vote for its discontinuation at the annual general meeting in May.

An extraordinary general meeting will be held immediately after the AGM to vote on changing the company’s investment remit to one of gradual disposal of its 42 property, infrastructure, asset finance and energy transition loans.

Assuming this is approved, the chair Alex Ohlsson said the company would distribute its £55m of cash to shareholders ‘as soon as practically possible’.

This will be the first in a series of capital payments via compulsory share redemptions the company will make as Gravis sells the assets and returns money to shareholders, a process that analysts have said will be lengthy.

Ohlsson said the company would continue to pay dividends of 6.325p per share a year for as long as possible. The shares currently yield 9%.

He added the board would continue to explore all options for a sale to hasten the wind-down. It launched a strategic review on the fund’s future in December after a US investment company withdrew from talks over a 78p per share offer. Earlier efforts to conduct a three-way merger with stable mate GCP Infrastructure (GCP ) and RM Infrastructure Income (RMII ) also foundered.