The board of the Edinburgh Investment Trust is set to appoint Majedie Asset Management as its new manager, following continued underperformance of the company under Invesco's Mark Barnett.
Under Majedie, the firm's CIO James de Uphaugh will serve as portfolio manager of the trust, which is looking to overcome more than three years of poor performance as a result of what the board described in a statement this morning as an "out of favour" investment style and stock selection issues.
The agreement will see Majedie receive an annual management fee of 0.48% of the market capitalisation of the trust up to £500m and around 0.47% on amounts above £500m.
This represents a significant reduction from the current levels of fees paid to Invesco of 0.55% of market capitalisation.
In June the board admitted to increasing its scrutiny of manager Mark Barnett, following three years of underperformance.
However, it said at the time that Barnett's approach was "the right one to meet the company's objectives".
The change is the latest blow for Barnett, following Invesco's decision to shift him to a joint-head of UK equities position alongside Martin Walker in November after continued underperformance.
Chairman of The Edinburgh Investment trust Glen Suarez said he was "disappointed by another weak result for the company in today's interim results", which extended the period of underperformance to beyond three years.
He added that de Uphaugh is a "highly experienced active manager with a flexible investment approach", and the board believes that he "has the right approach to meet our company's objectives of capital appreciation and dividend growth over the long-term".
De Uphaugh, who serves as CIO of Majedie, said: "Majedie's long-term, flexible investment approach, incorporating a commitment to responsible capitalism backed by fundamental analysis, is well suited to an investment trust that seeks total returns from both income and capital growth."
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