Investors must kill off this brutal assault on trusts by US activist, says ALEX BRUMMER
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Investment trusts have a long and occasionally chequered history. The very best – such as the Scottish Mortgage Investment Trust (SMIT) and the Rothschild Investment Trust (RIT) – have, down the decades, done a brilliant job for retail investors. But they are often traded at large discounts to their underlying assets.
These discounts reflect dissonance with shares on the London Stock Exchange in general, inconsistent performance and a view that they are often run for the benefit of insiders, fund management groups and executives, rather than investors. One of my first encounters with the investment trust industry, as a young financial journalist, dates back half a century to the implosion of the investment empire run by a former lord mayor of London Sir Denys Lowson.
An investigation by The Investors’ Chronicle established that Lowson’s family of investment trusts amounted to no more than a grand Ponzi scheme in which several trusts were invested in each other and the underlying assets all but non-existent. Raid: American hedge fund Saba Capital, run by Wall Street activist Boaz Weinstein, is targeting seven quoted investment trusts.
The stables were cleaned long ago, and high governance standards generally prevail at the seven quoted investment trusts being targeted by the American hedge fund Saba Capital. Saba is run by Wall Street activist Boaz Weinstein, who has acquired big strategic stakes.
