by Dave Baxter from interactive investor, 28th October 2025:
Investment trusts have had good news this year, in the form of substantial share price rises and shrinking discounts to net asset value (NAV). After several years of fighting for survival, the sector is showing signs of recovery.
But a disruptive force remains in the form of Saba Capital. The US activist investor’s actions could still have plenty of repercussions, good and bad, for shareholders..
The investment trust world might bristle at its presence but Saba has arguably driven plenty of positive change.
But investors do need to think twice about whether they should back campaigns for a trust to wind up, given that some of these names are on a cyclical low and waiting for a recovery.
CQS Natural Resources & Income is a good example: it could have been liquidated earlier this year, had Saba won its initial campaign. Had that happened, shareholders would have missed out on the huge recovery of recent months..
What’s interesting elsewhere is that, having previously targeted equity trusts, Saba has extended its reach into less liquid, “alternative” asset classes..
“One of the things I wondered was whether they had run out of targets in the equity space,” said James Carthew, head of investment company research at QuotedData.
“If you buy stuff on a sub-10% discount you don’t have the same force of argument and people aren’t as bothered. It’s harder to get the groundswell of support. The magnitude of the uplift is less, too.”
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