The newly appointed board of Impax Environmental Markets (IEM), elected following Saba Capital’s successful campaign to replace the trust’s previous directors in June, has moved swiftly to terminate the trust’s investment management agreement with Impax Asset Management.

The current manager has a contractual 12-month notice period, but the board has asked Impax Asset Management to waive all or a substantial part of that notice period.

The decision follows a review of the company’s investment management arrangements and the board will now launch a formal request for proposal (RFP) process to identify a replacement or explore other strategic alternatives that it believes will best serve shareholders’ interests.

The board said it intends to appoint advisers to oversee the process and will take account of the views of shareholders and other stakeholders, alongside the company’s future investment strategy.

The move marks the latest stage in a turbulent period for IEM. The trust has spent much of the past two years grappling with a wide discount to NAV, weak relative performance and growing shareholder dissatisfaction.

Those pressures culminated in activist Saba Capital, which built a substantial stake in the trust, agitating for change. Earlier this year, shareholders overwhelmingly backed the board’s proposal for a 100% exit tender, allowing investors who wished to leave to do so close to NAV. Around 78% of the register elected to exit, leaving Saba with an effective controlling stake in the remaining company.

In June, shareholders voted to remove all five incumbent directors and elect Saba’s four nominees to the board – Caroline Bault, Steven Grey, Jason Chen and Aaron Morris.

The new board, chaired by Bault, has emphasised that, while nominated by Saba, it would act independently of the activist shareholder.

While the board has not indicated a preferred outcome, its reference to appointing a new investment manager “or strategic alternative” leaves open a range of possibilities, including appointing a different manager to run the existing mandate, reshaping the investment strategy or pursuing a wider corporate transaction.

Richard Williams, senior analyst at QuotedData, said: “This comes as no surprise. We wait to see whether, as many suspect, Saba will be elected as manager or whether the new FCA rules has put a spanner in the works. It will be unprecedented if it is appointed.”