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Two British investment trusts have been criticized by US activist Boaz Weinstein for calling on their shareholders last month to shake up their boards and put his hedge fund in charge of investment management. I rebelled.
The board of the Keystone Positive Change Trust said on Monday that it was “appalled” by Saba Capital’s approach, saying the U.S. hedge fund “separated the board of directors without a controlling shareholder to pursue its own objectives.” They are acting opportunistically to seize control.” ”.
Another trust, Baillie Gifford US Growth, also called on shareholders to vote against Saba’s proposal. The trust is planning a general meeting of shareholders in February.
Mr. Weinstein’s Saba Capital has called for a board replacement meeting, saying he is a “disqualified shareholder” due to the trust’s poor performance. Saba Capital is targeting a total of seven trusts, including CQS Natural Resources Growth & Income, Edinburgh Worldwide Investment, European Smaller Companies, Henderson Opportunities and Herald Investment.
Mr. Saba is the largest shareholder in each trust, with stakes ranging from 19% to 29%. The total investment amount will reach 1.5 billion pounds.
The hedge fund is proposing two new directors for each fund, with Weinstein joining one fund and Paul Kazarian, head of Saba’s mutual fund strategy, taking over the remaining six trusts. If the resolution passes and the new board decides to replace the existing fund manager, Mr. Weinstein will recommend Mr. Saba as the trust’s new manager.
Keystone’s board, managed by Baillie Gifford, said: “We believe that Saba’s plans lack transparency, have a significant disregard for good governance, and have the potential to introduce significantly higher fees.” said. The proposed resolution is not in the best interests of all shareholders and creates significant uncertainty.
“Given Sabah’s considerable voting ranking, every vote against its resolutions is important. We urge all shareholders to vote against all resolutions. It’s important.” A resolution requires at least 50% of the votes cast to pass.
Herald Trust’s board last week recommended shareholders vote against Saba, saying the company’s investment strategy has been “highly successful over the long term” and has increased net assets by 865 percent since Saba’s launch. He stated that the company has achieved total return.
Herald Chairman Andrew Joy said the board “believes that Saba wishes to take control of the company and change the company’s investment strategy for its own economic benefit.” Ta. . . Significant value may be lost. ”
The investment trusts targeted by Saba are suffering from a market capitalization that is lower than the value of their assets. Discount rates range from 12% to 14.7% over three years. Other trust administrators include Janus Henderson and Manulife.
The UK investment trust sector, which manages around £265bn of assets, has come under wider pressure due to deep discounts.
Saba did not immediately respond to a request for comment.
