Saba Capital has received regulatory approval in Dublin to launch the active exchange-traded fund that will expand the activist’s campaign against UK investment companies.

In a filing last week the Central Bank of Ireland upgraded the Saba Capital Investment Trusts UCITS ETF from “null” to “active” and gave a legal entity identity to the fund that the US hedge fund registered last September.

Once launched, the new active ETF will be a European equivalent to the $374m Saba Closed-End Funds ETF (CEFS) the firm has run in the US with a high income remit since 2017.

Despite the plan to launch the ETF targeting London-listed closed-end fund trading on wide discounts, Saba has continued to attempt to take control of a UK investment company and make it an activist vehicle.

Last month it was defeated for a second time in its bid to oust the board of the Edinburgh Worldwide (EWI), though it remains in a threatening position against Herald (HRI) and Impax Environmental Markets (IEM).

Our view

David Batchelor, senior analyst at QuotedData, said: “We provided our initial thoughts when news of the fund first emerged, and we stand by them now. Firstly, it is clear that not the whole universe of investment companies will be available to the fund, as an ETF really needs large liquid underlying holdings in order to function. Further, there are already funds targeting investment company discounts – eg AVI Global Trust (AGT) and MIGO Opportunities (MIGO), with independent boards and without the considerable baggage that has built up around Saba. It is a bit hard to see who the market is here, given how little interest investors in investment companies have shown in dancing to Saba’s tune since they emerged on the scene, but we shall see.”