Linus Uhlig, Investment Week, 18 December 2024:
Analysts have slammed hedge fund manager Saba Capital after it launched campaigns to oust the boards of seven investment trusts of which it is a major shareholder.
Activist New York-based hedge fund Saba has requisitioned general meetings of shareholders at seven UK investment trusts to reconstitute their respective boards of directors.
The Baillie Gifford US Growth trust, Edinburgh Worldwide and Keystone Positive Change, are in the firing line as well as a pair of Janus Henderson trusts, the Henderson Opportunities trust and European Smaller Companies trust.
The remaining two portfolios being targeted are CQS Natural Resources Growth & Income and Herald investment trust; Saba holds between 19-29% of the shares in each trust, making it the largest investor in each investment company.
According to analysts at brokerage and investment banking firm Stifel, Saba are “likely to have a strong hand in these upcoming votes” because recent equity trusts have seen around only 25-30% of shareholder turnout..
However, others have noted that while the clarity is useful, there are some flaws in Saba’s plans.
According to Matthew Read, senior analyst at QuotedData, “it is great to finally get some clarity on Saba’s intentions”.
“The activist investor has been stalking parts of the investment companies’ sector for some time but, despite various boards and managers attempting to engage with it, all of those that we have spoken to have said that Saba was not interested in talking to them,” Read added.
After reading this morning’s statement, Read said there remains “an obvious flaw in their strategy”.
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