Investment trust insider on the end game for Saba – James Carthew: Saba’s wrong, discounts aren’t all bad
Saba Capital’s defeat at six of the seven investment trust votes it requisitioned doesn’t mean the activist will give up, but it needs to work with boards rather than against them
We are nearing the end game of Saba’s initial assault on the UK investment companies industry. Based on the outcome of the last six votes, I am fairly confident that Edinburgh Worldwide (EWI) will prevail, but that does not necessarily mean that Saba will give up and go away.
In a last desperate attempt to win support, Saba actually snail-mailed a letter to EWI shareholders. In it, it lifted four quotes from a variety of articles in support of its efforts. The first of these from The Economist said: ‘It is a damning verdict on the trusts’ managers that their portfolios would be worth more if they were carved up and sold for parts.’
The implication here is that all trusts trading on discounts (well over 90% of them) deserve the Saba treatment. That message suits Saba’s agenda, but it feels like an ignorant statement from a financial journalist…. read more here