Marlborough Fund Managers is taking over as authorised corporate director of the 30m Matrix Quantock UK Growth fund following a vote from shareholders to remove Matrix Money Management. Matrix is considering legal action.The transfer of ACD was approved by shareholders of the fund at an extraordinary general meeting last week, which followed a resolution tabled by Marlborough, RC Brown Investment Management and one other shareholder. The Collective Investment Schemes rulebook states that such a resolution needs the backing of shareholders representing over 10% of the issued share capital. Marlborough’s fund of funds range invests 4m in the Matrix Quantock portfolio, amounting to 13.5% of the fund. Fund manager Bob Brown at RCBIM will continue to run the fund, while Marlborough’s sales and marketing team will promote it. Matrix claims this is the first recorded corporate action of its type in an Oeic. Matrix managing director Bridget Guerin says: “When corporate action is taken in a listed security, share purchases can benefit other shareholders. But in an open-ended fund, large institutional shareholders can benefit while there is no tangible gain for small shareholders.” She explains: “It is possible we will have to go to court to seek compensation in order to protect our commercial interests and pay the administrator [Capita Financial] for breach of contract. The fund’s shareholders have already incurred the costs of setting up the EGM and legal advice.” Guerin says the action risks setting a destructive precedent for the industry: “This route could potentially allow unhappy fund managers employed at Oeic groups to leave the company and take the funds with them.” Marlborough chairman Andrew Staley says that Marlborough has acted both ethically and professionally in the best interests of all clients, and that the decision to invest clients’ assets into the Matrix fund was made purely because of its performance record. Marlborough has confirmed it will meet all reasonable administration costs of the move and plans to make a number of changes to the fund’s structure. These include a reduction in annual management charge for institutional investors from 1.2% to 1% and an increase in trail commission.