Saba Capital has opened a 5.2% position in Allianz Technology Trust (ATT) and included it in the activist hedge fund’s new active ETF targeting undervalued investments trusts.
The New York based firm, which is battling to take control of Herald (HRI) and Impax Environmental Markets (IEM), holds most of the £96m ATT stake in total return swaps and a small portion in physical shares, as is its customary practice.
According to a filing yesterday, it controls nearly 18.4m shares, having passed the 5% threshold on Monday 23 February and notified the £1.8bn investment trust the next day.
The disclosure came as Saba officially listed its Dublin-based active exchange traded fund, Saba Capital Investments Trusts UCITS ETF (UKIT). Managed by Saba boss and founder Boaz Weinstein and portfolio manager Paul Kazarian, UKIT will seek holdings in closed-end funds trading on discounts. Launched on the HANetf platform, it charges total expenses of 1.5% a year and has listed in London, Milan and Frankfurt.
Although the ETF is largely uninvested and sits on more than 84% cash, a small 0.3% weighting in ATT is one of eight investment companies and real estate investment trusts listed as holdings in the new fund.
The others are Edinburgh (EDIN), Unite (UTG), HarbourVest Global Private Equity (HVPE), Pantheon International (PIN), Montanaro European Smaller Companies (MTE), Polar Capital Technology (PCT) and Henderson Smaller Companies (HSL).
There has been a slight weakening in ATT shares in the past month as software stocks have sold off on fears of the competitive impact of artificial intelligence (AI) on their businesses.
At yesterday’s close the shares stood at a 9.4% discount to net asset value, around 1% wider than at the end of February, but in line with their one-year average.
Lead managed by Mike Seidenberg in San Francisco, ATT has made 39% and 89% for shareholders over one and five years. That beats the Nasdaq 100 index’s 18% sterling return over 12 months but lags the benchmark’s 119% five-year total return. It is also outperformed by its main rival Polar Capital Technology, which has surged 59% and 132% over one and five years having positioned the portfolio entirely around the AI theme.
In commentary released last month, Seidenberg noted the “sharp market rotation toward AI-driven hardware and datacentre infrastructure, which has weighed on software-related exposure, reflecting earnings anxiety, macro positioning, and valuation compression rather than a deterioration in underlying demand.”
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