Update of yesterday’s story: RM Funds calls on the chair of £308m battery fund to resign after 30% of votes at yesterday’s general meeting supported its attempt to shake up the board.

Gore Street Energy Storage (GSF) has pledged to make two changes to its board after the battery fund survived a serious challenge at a shareholder meeting from rebel investor RM Funds which said the 30% votes it received showed there was “considerable shareholder frustration with the status quo”.

At a general meeting on Wednesday afternoon, RM Funds failed to get its two nominees elected with 67%-69.5% of votes cast against the appointment of restructuring specialist Brett Miller and Ian Dixon, its other nominee.

Over 69% of votes were against the removal of the chair Pat Cox and non-executive director Caroline Banszky on a high turnout of 62%.

By contrast, just over 30% of votes, or around 19% of all shares, were in favour of the four resolutions filed by Edinburgh-based RM Funds last month after the international battery fund disappointed shareholders with a dividend cut.

RM Funds wanted the two directors to oversee the disposal of non-core assets and seek a merger to revive shareholder returns in a £308m closed-end fund stuck on a 41% share price discount.

Its campaign lost some momentum when Gore Street Energy announced the results of its strategic review, promising to sell construction assets accounting for 8% of its portfolio to fund upgrades and higher revenues from its operational projects.

On Thursday RM Funds, a 5% shareholder, called on Cox to resign. “At nearly one third, the level of opposition here reflects a serious loss of confidence in leadership. In our view, it would be appropriate for the chair to step down with immediate effect.”

Faced with a “significant minority” revolt, Cox said the company had listened to shareholder feedback on a range of topics including board composition, capital allocation and long-term strategy.

“With respect to board refreshment, the first new appointment is expected imminently, and a further appointment in 2026,” the chair said.

Ben Yearsley, director of Fairview Investing, said on X: “Nice to see the board making conciliatory noises. At least they aren’t sticking their heads in the sand now.”

RM Funds was unimpressed, however, saying the board had acknowledged that fund manager Gore Street Capital had met candidates for the non-executive director positions, excluding its nominees. “In our view, the board’s role is not to cultivate close relations with the manager, but to hold the manager to account on behalf of shareholders,” it stated.

In line with the AIC corporate governance code, the board will report on the actions it has taken after its recent consultation with shareholders and will undertake a further round of investor engagement in around six months’ time.

“With the distraction of the general meeting now behind us, the board is fully focused on delivering the strategy we have outlined, including sale or co-investment for the company’s c.495MW of preconstruction assets, increasing the duration of key GB and Irish assets, increasing revenue through propriety revenue optimisation models, as well as seeking further cost reduction in addition to the investment management fee reduction, and continuing the board refreshment process already underway,” Cox said.

RM Funds portfolio manager Pietro Nicholls said he was committed to constructive engagement with GSF while continuing “to hold the board to account to ensure the persistent discount to NAV and prolonged share price underperformance are addressed.”

While Gore Street Energy shares have rallied 33% this year, this is less than half the 72% recovery rival Gresham House Energy Storage (GRID) has made after a damaging slump to UK revenues at the start of last year.

Nicholls said the board had given unsatisfactory or incomplete answers to several of its questions at the AGM, including reports of conversations it had with shareholders over a possible wind-up if the wide share price discount to net asset value persisted.

“This lack of clarity is unhelpful and highlights the need for greater transparency in the company’s communications,” he said.

The stage is set for a further potential clash at the company’s annual general meeting on 18 September when RM Funds and other disaffected shareholders could vote against the re-election of the board.