The board of battery fund Gore Street Energy Storage (GSF) remains under pressure after shareholders blocked two special resolutions at yesterday’s annual general meeting and over a quarter voted against the re-election of chair Patrick Cox.

Including the votes of rebel shareholder RM Funds, which holds a 6% stake, nearly 27% of votes were cast against Cox who has been chair since the company launched in 2018.

Caroline Banszky, the non-executive director also targeted by RM Funds in an extraordinary general meeting it requisitioned last month, saw nearly 22% of votes against her.

The other three non-execs received objections from 17.7% to 19.1% as a minority of investors followed RM Funds’ call to vote against the re-election of the board and against four resolutions relating to the issuance of shares. Two of these were special resolutions that narrowly failed to get their required 75% support and did not pass.

Although the level of dissent is below the 30% support RM Funds gained for its attempt to remove Cox and Banszky in August, the board acknowledged it was a “significant” number adding it “takes this feedback seriously”.

In line with the AIC Corporate Governance Code it will report on its engagement with shareholders and update on its progress in six months’ time.

The company had already said it would make two changes to its board after RM Funds failed to get its nominees elected at last month’s EGM. The first of these was the appointment two weeks ago of infrastructure specialist Simon Merriweather. 

RM Funds has pressed the company to make disposals and accelerate plans to improve returns to shareholders who have seen their stakes fall 23% in the last five years to trail 47% below net asset value, with a dividend cut in July compounding their disappointment.

Ahead of last month’s EGM, the £275m company said it would sell pre-construction assets accounting for 8% of its portfolio to fund upgrades to its battery storage facilities. 

Missing fees

RM Funds’ call for greater transparency and cost control has received the support of analysts at Investec. In an open letter last week before the AGM, RM fund manager Pietro Nicholls said he had asked for a full fee reconciliation from GSF after being unable to match the management fees disclosed in its annual report with those reported by manager Gore Street Capital in its annual accounts.

Investec analysts said on Wednesday Cox had confirmed in writing that payments from GSF’s subsidiaries to Gore Street Capital are not disclosed in the investment company’s accounts. 

“As such, the total fees being earned by the manager appear to be c£5m more than in the accounts, +90%,” analyst Ben Newell wrote in a note to investors.

“Even if GSF is meeting the letter of the accounting standards, it is clearly, in our view, falling woefully short of industry standards and the expectations of investors,” Newell said.

In June the company announced a reduction in its fund management fees would save around £1.1m a year.