People often quote Warren Buffet’s ‘Only when the tide goes out do you discover who’s been swimming naked’ when looking at the problems besetting the investment company sector, but most of the worst examples of failures recently have not been the consequence of higher interest rates, inflation or shifts in market sentiment, but of governance and management failures that could have happened at any time.

Progress, of a sort, has been made in the mess at ThomasLloyd Energy Impact (TLEI ) with the loss of the continuation vote last week. That frees up the board to look at a wider range of options for the future of the closed-end fund. My hope is that someone can be found to take on the fund, perhaps after the problematic Indian assets have been carved out into a separate vehicle.

The independent investors backed the board’s call to reject continuation by 69:31 (the actual vote was 58:42 against continuation). My feeling is that shareholders were always likely to vote this way, even before the mudslinging started between the warring parties. I am left wondering whether there are grounds for any legal action against the fund manager Thomas Lloyd Group?

Progress too has been made with Home Reit (HOME ), where shareholders voted overwhelmingly to approve the new investment policy, which means that AEW UK Investment Management is now in the driving seat and can advance its plans to stem the rot.

We also just saw leases on 100 of its properties transfer back to Home from One CIC, and the Reit will now become the direct landlord to a firm owned by Mears Group. The rent on these falls precipitously from about £1.2m to about £900,000 but it should at least get paid.

However, the sheer scale of problems with Home Reit’s tenants – £3.4m of rent collected for the five months ended 30 April 2023, versus £25.9m demanded, and multiple tenants in liquidation – must be putting severe strain on the company’s cash flows.

The £5m fire sale of properties that had been bought for £8m, which was announced on 4 August added some cash to the pot but gave credence to the argument that Home Reit was duped into paying well over the odds for substandard properties. As a shareholder, I’m increasingly feeling that my best hope for recovering some value here may be the legal case(s) that Harcus Parker is preparing.

I was encouraged to see that Amber Infrastructure Group, the firm behind International Public Partnerships (INPP ), is taking up the reins at US Solar Fund (USF ). I was flummoxed when the USF board initiated a strategic review of the fund last October. At the time, the investment company had a market value of about $282m and seemed to be firing on all cylinders.

Unsurprisingly, key members of the management team walked away following the news. In June, the fund sold a prize asset at a profit but shortly thereafter the board ruled out selling the rest of the portfolio. Today, USF is valued at just $206m and trades on a discount closer to 35%.

The board’s abrupt change of tack with its sudden decision not to sell the rest of the portfolio raises a question mark over the accuracy of its net asset value (NAV) in my mind. Nevertheless, the new manager has a chance to rebuild investors’ faith in the company, which might be helped if the board explained in greater detail why it was so quick to press the fund’s self-destruct button and still feels it should hang around now that it has decided to stop the countdown.

James Carthew is head of research at QuotedData.

Any opinions expressed by Citywire, its staff or columnists do not constitute a personal recommendation to you to buy, sell, underwrite or subscribe for any particular investment and should not be relied upon when making (or refraining from making) any investment decisions. In particular, the information and opinions provided by Citywire do not take into account people’s personal circumstances.