Introduction
Investment Trust companies are closed-ended, publicly listed companies that pool shareholder capital to deliver long-term returns through diversified, actively managed portfolios. They constitute a distinctive and influential segment of the UK listed market, forming a significant proportion of the FTSE 350; as at March 2025, there were 6 FTSE 100 and 90 FTSE 250 investment companies. Their closed-ended structure and externally managed model create unique governance dynamics that differentiate them from conventional operating companies. In this article, we explore the features that shape the governance framework of Investment Trusts and examine how these nuances manifest in their Annual General Meetings (AGMs). We also reflect on the voting trends from the 2025 AGM season.
How they operate
Fundamentally, investment trust companies operate within a tri-party governance model:
To understand some of the governance drivers that operate, we’ve highlighted some key considerations below:
- Core Purpose: To deliver shareholder value through portfolio allocation and long-term investment performance.
- Business Model: External investment manager appointed to implement agreed mandate and asset allocation strategy.
- Board Composition & Role: Independent, non-executive board with fiduciary oversight; acts as principal agent for shareholders in monitoring the external manager’s performance.
- Management Structure: Investment management is outsourced, governed by a management agreement defining mandate, fee basis, and performance parameters.
- Shareholder Value Drivers: Net Asset Value (NAV) performance, discount/premium management, sector allocation, gearing policy and fee efficiency.
- Regulatory Environment: Subject to Listing Rules plus additional investment company rules and AIC best practice guidelines.
Annual General Meetings
To understand the dynamics of AGMs from an investment trust company perspective, it is important to recognise that their structure and governance model create a distinct set of priorities and shareholder interactions. We highlight below some key considerations:
- Shareholder Base: Often more concentrated among wealth managers, private client brokers and retail shareholders.
- Key Discussion Points: NAV performance, discount management, manager performance, fee structure, dividend sustainability.
- Manager Attendance: External investment manager generally attends and presents on portfolio performance.
- Shareholder Engagement Style: Questions often target the board-manager relationship, including challenge and oversight rigour.
- Voting Sensitivities: Reappointment of the investment manager and board may attract scrutiny if performance or discounts are weak.
2025 AGM Season
We have analysed the voting outcomes for standard AGM resolutions across investment trust companies in the FTSE 350, for the period January-September 2025. This analysis benchmarks the 2025 results against those observed in 2024, providing insight into evolving shareholder sentiment and voting behaviour across the sector.
Voting outcomes for the FTSE 350 investment trusts remained strong in 2025, with average support across standard resolutions exceeding 97%. However, overall approval softened slightly versus 2024, and the number of materially opposed resolutions increased, largely driven by heighted shareholder activism.
The most notable movement occurred in director (re)elections, where average support declined from 98.18% to 97.21%, and 13 trusts recorded sub 80% outcomes, up from 3 in 2024. This is reflective of the impact of the Saba Capital campaign, which challenged boards over performance, governance, and discount management.
Support for reports and accounts also eased, by contrast, remuneration-related resolutions strengthened. Votes on capital authorities, including share allotment, disapplication of pre-emption rights, and market purchase of shares, remained resilient.
Overall, the 2025 season confirmed continued broad investor support for investment trust governance while highlighting a sharper focus on accountability for persistent discounts and underperformance. Boards may wish to prepare for more targeted, issue-specific engagement in 2026, even where headline support levels remain robust.
2025 Levels Of Investor Support For Investment Trusts In The FTSE 350
Key Additional/Distinctive Resolutions
In addition to the standard AGM resolutions you may see on any FTSE 350 AGM agenda, investment trust companies often include several sector-specific authorities that reflect their closed-ended structure and externally managed model. These resolutions are central to how boards manage capital discipline, shareholder alignment, and long-term performance. The most notable examples are:
- Continuation Vote: Seeks shareholder approval for the trust to continue operating in its current form.
- Issuance of Shares (Premium to NAV): Allows issuance of shares to manage liquidity and reduce discount volatility, but only at a premium to protect existing shareholder value.
- Gearing/Borrowing Limit Approval: Provides shareholders or board-level sign off on leverage parameters.
Closing thoughts
Investment trust companies occupy a unique position within the listed market, with distinct governance structures, investor dynamics and AGM considerations. Understanding these nuances is critical to ensuring effective board oversight, transparent shareholder engagement, and long-term value creation.
At EQ, we combine deep sector insight with extensive experience in supporting investment trust companies. To learn more about our expertise and how we can assist your organisation, please visit our Investment Trust hub to find out more and talk to us about how we can help.