The board of Smithson (SSON ) investment trust has bowed to shareholder pressure and reversed its decision to not hold a continuation vote.

In annual results last week, the board said it would not propose a continuation vote at the annual general meeting, despite the shares breaching the trigger point of a double-digit discount in 2023.

Chair Diana Dyer Bartlett claimed it was not appropriate given the consistently positive feedback from shareholders supporting the £2.3bn global fund and its investment proposition.

The decision sparked an outcry from analysts and investors, including Capital Gearing Trust (CGT ) manager Peter Spiller, who told Citywire he was ‘horrified’ and would vote against Dyer Bartlett’s re-election at the AGM in April.

This has sparked a rethink with Smithson stating today: ‘Subsequent feedback from certain shareholders has, however, emphasised the value to them of a continuation vote as a point of principle. The board has therefore determined that an ordinary resolution in favour of continuation will be included in the notice of AGM.

‘The board thanks those shareholders with whom it has engaged on this matter for their constructive input and support of the company and looks forward to maintaining an open dialogue with investors going forward.’

Chris Clothier, co-chief investment officer at CG Asset Management, which runs CGT, said: ‘I welcome the decision by the board to reinstate the continuation vote. I’m glad that they have listened to feedback from shareholders and this is a good step in the right direction. 

‘However, CG Asset Management would need to see a commitment to increase the pace of buybacks from the board for them to win back our unequivocal support,’ Clothier added, an indication that Smithson is not out of the woods yet.

Data from Refinitv shows the largest shareholders in the trust are RBC Brewin Dolphin, Rathbones and activist investor City of London, with respective stakes of 4.5%, 3.7% and 1.5%.

A continuation vote always carries risks for an investment company, but the response of investors and analysts suggests Smithson will survive the ballot. Shareholders may want a chance to express their concern about the performance in 2022 when the shares slumped by more than a third, rather than bring the five-and-a-half-year fund to an end.  

Shares in Smithson managed by Fundsmith’s Simon Barnard have gained 1.2% over the last week to £13.92, a 13% discount to the most recent net asset value of £15.96.