By Sarah Thompson, Anthony Macdonald and Tim Boyd

Embattled listed investment company Contango Income Generator Ltd (CIE) wants to change direction, but not if its two biggest shareholders have anything to say about it.

Street Talk understands both Lanyon Asset Management and Wilson Asset Management will vote against CIE’s proposal to become a global long/short manager from a long-only Aussie equities fund.

Lanyon will reveal its voting intentions to the market on Thursday morning, in a cover letter accompanying a change of substantial shareholder notice announcing it now owned 7.1 per cent after taking shares in last week’s placement.

Geoff Wilson’s shop meanwhile has a 14 per cent-odd stake in CIE – so between them, that’s more than 21 per cent of the share register opposing the changes.

Lanyon reckons the new direction would see the fund’s risk profile dialled up considerably – from long-only positions in local equities to becoming a global long-short hedge fund – and managing director David Prescott labelled that “absurd”.

As part of CIE’s proposal, the fund would be managed by California-based WCM Investment Management – which had more than $85 billion in assets invested as of June 30 – and management fees would increase to 1.4 per cent a year, plus a performance fee.

“We query how WCM, a respected manager that prides itself on adhering to strict ESG principles, can be a party to a company (CIE) that quite clearly has no interest in anything that closely resembles minimum standards of corporate governance,” Lanyon’s Prescott told this column.

He labelled the fee hikes “totally scandalous”.

Meanwhile, in addition to planning on voting against the changes at a September shareholder meeting, Wilson Asset Management also has a few resolutions of its own it intends to propose. Those include removing CIE directors and nominating Geoff Wilson and former media executive Glenn Burge to the board as well as appointing WAM as the fund’s manager.