Who are Saba Capital?
Saba Capital is a New York hedge fund founded by investor Boaz Weinstein, 52, a chess master and accomplished poker player.
It was joined yesterday by Rossie House Investment Management, which is a shareholder in five of the seven trusts targeted by Saba.
The AIC has written to the UK’s major retail investment platforms, ‘urging them’ to inform investors of the upcoming meetings at the trusts so they can vote on Saba’s proposals.
Rossie House partner Scott Baikie said that the hedge fund’s proposals were ‘opportunistic’ and would be ‘damaging for the trusts’.
The issue is the gap between the value of the assets the trusts own – and the value of the trusts themselves on the stock market
He added that Saba’s motives were ‘self-serving’ and could ‘endanger shareholder protections’.
It comes as two of the investment trusts targeted by Saba encouraged shareholders to oppose the US firm’s plans.
‘They need to consider whether the investment trust would still meet their needs, as well as any potential tax implications.’
The firm also turned its guns on the European Smaller Companies and Henderson Opportunities trusts, saying that their boards had ‘failed shareholders’ and made some poor investment decisions.
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‘The board’s message to shareholders is clear: please exercise your vote and don’t let Saba take unnecessary risks with your money,’ Colquhoun said. It follows similar remarks on Tuesday from CQS Natural Resources Growth and Income, another trust in Weinstein’s crosshairs.
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On Tuesday, Evelyn Partners became the first shareholder to declare its opposition to Weinstein’s plans.
He formerly worked at Deutsche Bank on Wall Street before leaving to set up Saba in 2009.
What are investment trusts?
Companies listed on the London Stock Exchange that invest in portfolios of stocks, bonds or other assets such as property.
Overall, Saba is calling for a shake-up of seven London-listed investment trusts, which collectively have a market value of around £4billion.
They have a long history in the UK dating back to the Victorian era when they funded railways and other engineering projects.
‘Investors need to understand the details of what is being proposed by Saba, including changes to the trusts’ boards, strategy, manager or fees,’ said AIC boss Richard Stone.
