By: Elliot Gulliver-Needham, Investment Reporter, CityAM, 19 December 2024:
A shake up could be coming for the UK’s investment trust industry after US hedge fund Saba Capital launched a campaign to topple the boards of seven different companies yesterday..
The New York-based hedge fund has been stalking the sector for some time but, despite attempts by various boards and managers attempting to engage, the investor is said to have kept its cards close to its chest..
Saba’s proposals are to appoint two of its own directors on each board of the seven trusts. Partner Paul Kazarian has been tabled as a candidate on all the boards bar Baillie Gifford US Growth, where founder and CIO of Saba, Boaz Weinstein, has been proposed as the candidate.
Alongside the board shake-up, the activist investor has proposed a range of ideas to boost the performance of the vehicles, stretching from appointing the hedge fund itself as the new investment manager to re-focusing their mandates on combining with other trusts..
“We don’t see how it can really accuse Keystone Positive Change’s board of inaction given the steps that it has taken,” said Matthew Read, senior analyst at QuotedData.
Meanwhile, Read stated the plan to overhaul trusts and quickly deliver liquidity and returns was an “obvious flaw” in the plan, as a noisy takeover and sell-off of assets could cause the market to quickly move against the sellers.
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