The board of the Jupiter UK Growth trust has agreed to stay with the fund house on condition that Richard Buxton is appointed as its manager.
For several months the trust's board has been considering its options following dire performance, with the prospect of firing Jupiter Asset Management to find a new manager on the table.
But, following Jupiter's announcement earlier this week that it would be buying Merian Global Investors, the board has decided to stay put, with star fund manager Mr Buxton appointed as the £47.5m trust's new manager instead.
Tom Bartlam, the trust's chairman, said: "Over the last few months, the board considered a range of options for the future of the company. After careful consideration, we are pleased to have reached an agreement to appoint Richard Buxton as lead fund manager of the company.
"Richard is one of the most prominent UK equity investors and brings with him a wealth of experience. The board looks forward to working with Richard and his colleagues to determine the best way to broaden and grow the appeal of the company, while continuing our association with Jupiter."
Mr Buxton, who is Merian's head of UK equities and manages the £1.7bn Merian UK Alpha fund, will be supported by long-running colleagues Errol Francis and Ed Meier.
He said: "My team and I are delighted to be appointed to manage Jupiter UK Growth investment trust. We look forward to working with the board and to using our proven long-term approach to improving the returns to shareholders and growing the company over time."
There will be no change to the trust's investment objective or policy as a result of the change in manager and the management fee will remain the same. But as part of the change Jupiter has agreed not to charge a management fee for the entirety of 2020.
Andrew Formica, Jupiter's chief executive, said: "I am delighted that Richard will be taking on the lead fund management responsibility for Jupiter UK Growth investment trust. Jupiter is committed to growing the assets under management of this trust and of our investment trust business generally. This appointment is a significant development in achieving this objective."
Over the past three and five years, the Jupiter UK Growth trust has been the overall worst performer in its sector, the AIC UK All Companies.
In the past three years the fund has returned 4 per cent, while its sector has returned an average of 30 per cent.
Mr Buxton's fund has underperformed its sector marginally over the past three years, returning 18.3 per cent while the IA UK All Companies sector returned 19.5 per cent.
Steve Davies, the Jupiter UK Growth trust's previous manager, will remain the manager of the £915m Jupiter UK Growth fund.