Cristian Angeloni, Investment Week, 11 February 2025:
Saba Capital’s revelation that it would target four investment trusts in a bid to transition them into open-ended funds has been met with perplexity by the sector.
On Monday (10 February), the US hedge fund revealed intentions to go ahead with a ‘Plan B’ of its investment trust activism campaign, looking to requisition meetings at four trusts to “unlock liquidity” for shareholders.
The vehicles in question, CQS Natural Resources Growth & Income (CYN), European Smaller Companies (ESCT), Middlefield Canadian Income (MCT) and Schroder UK Mid Cap (SCP), are yet to receive the formal requisition requests from Saba itself..
During his keynote speech at the London School of Economics Alternative Investment Conference on Monday, Saba founder and CEO Boaz Weinstein claimed “we do not need investment trusts”..
However, Ben Yearsley, director at Fairview Investing, questioned the move towards open-ended funds altogether. He told Investment Week he did not see this as a solution and did not think it was a viable option for those trusts that have already set out similar plans – namely Keystone Positive Change and Henderson Opportunities.
“But if these wake-up calls force more shareholder awareness and better practices from boards then that is a good thing,” he said.
James Carthew, head of investment company research at QuotedData, argued Saba “does not seem to have got the message that shareholders in these trusts quite like what they have and are not looking for change”, after its defeat at six of the original Saba seven.
“Saba claims to have held conversations with investors on the need for liquidity at net asset value, but we would take that with a pinch of salt – how many conversations with how many investors exactly? When he is inevitably knocked back again, will he admit defeat or are we condemned to an endless cycle of pointless attacks?” he questioned.
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