Mounting criticism of Kepit's performance has provoked an unprecedented struggle for control of the trust, sparked by a hostile bid from one of its rivals, TR European Growth Trust.
Deutsche Morgan Grenfell, Fidelity, Foreign & Colonial, Schroders and Kleinwort Benson Investment Managment itself are among 10 firms in the running so far to manage its affairs.
Kepit's board has told interested firms that they have until Monday week to present plans for unlocking its value to Merrill Lynch, the trust's advisers.
Analysts believe other poorly performing investment trusts are vulnerable as well. Share prices of Edinburgh New Tiger, Fleming Mercantile, and two more Kleinwort trusts, Kleinwort Overseas and Kleinwort Chartered, suffer from the same heavy discount to net asset value that put Kepit in the bid frame.
Kepit was launched to great fanfare with a record pounds 500m raised in 1994 to capitalise on enthusiasm for privatisation by investing in European state sell- offs. Instead, the shares have consistently traded below their pounds 1 par value, closing at 93p at the end of last week.
Nevertheless, Sam Siddons, chairman of KBIM, rejected criticism. "It's nonsense to say that we have performed badly. We have outperformed the asset class in which we are allowed to invest," he said, adding it had actually outperformed KBIM's European privatisation index by 3 per cent.
The managers also argue that the discount to net asset value has almost halved to 11 per cent and is only 6 per cent if share warrants are included. Trusts typically trade at a discount to net asset value, although Kepit's has been one of the widest.
Ironically, this year's superior performance could see KBIM earning as much from Kepit as the almost pounds 4m it made in 1995, despite a changed fee structure designed to offset criticism.
The alleged recovery seems to have come too late, however, to impress Kepit's board and 77,000 shareholders. Early this year Shane Ross, the Irish senator and former Dublin stockbroker who is Kepit's chairman, confronted the managers with proposals for a radical restructuring.
The plans envisaged converting 60 per cent of the shares into convertible stock, which could be bought back over a number of years. The aim was to cut the oversupply of shares that had been depressing the Kepit price.
But a shareholder meeting to give the green light two weeks ago was adjourned after TR European launched its bid.
Stung by the criticism, KBIM is likely to join the fray this week with a plan for turning Kepit into a unit trust, an approach rejected earlier by the Kepit board.
Plans to liquidate the trust are also unlikely to find favour. Instead, Kepit will probably be shrunk so that big shareholders can escape and smaller shareholders see a higher share price and lower discount. The board is expected to announce its chosen plan in about two months.