Save UK investment trusts from New York’s blackjack raider. Vote no to Saba | Nils Pratley
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The City should protest about US hedge fund manager Boaz Weinstein’s attempt to seize control of seven trusts. Saba Capital’s proposals are “self-serving and destructive”, says the chair of one of seven London-listed investment trusts in the firing line of the New York hedge fund. Another is “appalled by Saba’s action and conduct”. A third says Saba is pursuing “a backdoor attempt to seize control of the trust”. A fourth thinks Saba is following an “unknown and unproven” strategy and, similarly, is trying “take control of your company for its own economic benefit”.
![[Nils Pratley]](https://i.guim.co.uk/img/uploads/2017/10/09/Nils-Pratley,-R.png?width=180&dpr=1&s=none&crop=none)
When opinion is so uniform, it is tempting to take the opposite side and suspect a case of vested City interests feeling threatened. After all, the popular criticism of investment trusts – companies that invest in other companies – is that there are too many of them and that their boards are complacent even when share prices trade at frustratingly wide discounts to the value of the underlying assets.
If Boaz Weinstein, the Saba founder, thinks he can “quickly deliver substantial liquidity and long-term returns to all shareholders”, why not let him try? Weinstein may drone on, irrelevantly, about his skill in counting cards at blackjack, but he has also committed £1.5bn by buying stakes of between 19% and 29% in the seven trusts.
But there is a problem with the exciting narrative of an outsider upsetting a cosy City club. It is nonsense. No shareholder in the trusts – US Growth, Edinburgh Worldwide and Keystone Positive Change (all run by Baillie Gifford); Henderson Opportunities and European Smaller Companies; CQS Natural Resources Growth & Income; and Herald – should be tempted to support Saba’s attempt to unseat seven boards and install its own nominees. Instead, they should actively vote against the hedge fund.
