The battle for control of Gresham House, Britain's oldest investment trust, comes down to a choice between whom shareholders best trust to run their company.

In one corner is Alfred "Freddie" Stirling, the 72 year-old executive chairman. Delivering annual figures at the end of April Mr Stirling said it wanted to sell off its entire property portfolio and its equity stakes in other investment companies over the next five years. Mr Stirling should understand the company and its assets best of all after years in charge.

Mr Stirling's track record may however be somewhat blotted after he batted away an indicative offer for the company made last September from Parkwood Property Investments, its 29.9 per cent shareholder. The offer was pitched at 875p per share. The latest published net asset value per share for the company was 837.9p at December 31, a fall from 902.4p at the end of 2006.

The shares today were unchanged at 460p.

In the other corner is Parkwood, run by a trio of younger property executives, who are promising shareholders they will break-up Gresham in 24 months if they are given control of the board at next week's annual general meeting.

Parkwood is run by Derek Lucie-Smith, a 60 year-old chartered accountant who once ran Moorfield Estates and who ultimately wants Mr Stirling's job. Robert Maxted, 59, his co-founder at Parkwood would also take a hands on role breaking up Gresham. Mr Maxted made his first multi-million pound fortune in 1987 selling Mount Row Properties, helped set up Pillar Properties and then ran it before it was sold to British Land for about £800 million. They are joined by John Lorimer, the third partner in Parkwood who brings 25 years experience in the property industry.

The trio hope to draw on their years of investment experience to turn around the fortunes of Gresham House.

Of concern to all shareholders is Gresham's cash position. Net cash at the end of December was just over £1.3 million. Interest payments on borrowings totalled nearly £1 million last year. The group made a £1 million operating loss. The board will on Monday ask shareholders to back its proposal for a 5p dividend which would see £293,000 cash leave reserves.

Of the £17.7 million of loans outstanding, Gresham has to repay or refinance £15.6 million within the next two years. Based on today's lending climate it would be hard to imagine the company being able to negotiate more favourable terms without first realising more cash from selling assets fast.

Parkwood is thought to have a handful of entrepreneurs lined up to sell on parts or the whole of Gresham if they take control. Shareholders may feel it is worth taking the risk and giving Parkwood the chance to realise what value is left in the company.

In January, when Parkwood first tried - and then aborted - to wrest control of the board, Gresham's board led by Mr Stirling accused its largest shareholder of trying to gain control through the back door after failing to push through a bid for the whole business “on the cheap.”

That original 875p approach today looks fully priced. It is time for investors to open the back door and at the very least hear what the Parkwood group has to say on Monday before voting on what they think is in the best interests of the entire company.

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