Cristian Angeloni, Investment Week, 13 January 2025:
As the financial services world was getting ready to shut their laptops, bring out the mince pies and get ready to celebrate the Christmas holidays and the New Year, US-based hedge fund Saba Capital had different plans in mind, as it unveiled some last-minute activism to end an ever-eventful 2024 with..
But one of the most peculiar parts of the plans put forward by Saba is not only the removal of all seven boards, but for them to be replaced by a two-director board comprising a Saba representative and one independent director appointed by the hedge fund..
When I asked Saba about such plans and their potential lack of compliance with the Listing Rules, the group told me that, if its nominees are elected, “the board of each investment trust will be legally compliant at all times under the FCA Listing Rules and will ensure compliance with the highest standard of governance”..
But it wasn’t just Saba’s plans to replace the current directors with a two-person board that sparked questions over the independence of the potential future boards.
On Thursday (9 January), Saba unveiled plans to offer an exit strategy for shareholders of the Herald investment trust after a year, at 99% of net asset value – the only trust such an offer has been made for among the seven in question.
Following the proposals, James Carthew, head of investment companies at QuotedData, accused Saba of having a “tortured logic” in claiming to know what an independent board would do in the future
Carthew called the plans “worrying”, and argued they clearly imply that Saba “believes it can direct the board’s actions”.
He added: “We cannot get our heads around how a board consisting of Saba employees, Saba appointees, and persons that these Saba-connected directors later co-opt onto the board could ever be construed as independent.”
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