Hedge funds Brookdale Investment Partners and Eisler Capital have taken a stand against Boaz Weinstein’s Saba Capital in a high-profile fight over control of seven UK investment trusts, according to reports.
The reports cite recent filings with the UK’s Financial Conduct Authority as revealing that Brookdale has established short positions in two of Saba’s targets: Edinburgh Worldwide and Herald, signalling it is betting against Saba’s ongoing activist campaign, which is aiming to reshape the trusts’ boards, while Eisler took a 0.5% short against Herald earlier in January.
Last week, however, Saba faced its first significant setback when its attempt to unseat the board of one of the targeted trusts – Herald Investment Trust – failed in a shareholder vote.
Brookdale and Eisler’s opposing position introduces a fresh layer of intrigue to the unfolding battle, with the hedge funds seemingly betting that Saba’s efforts will not result in the desired shakeup, which could lead to a decline in share prices for the targeted trusts.
Saba’s activist strategy has focused on narrowing the discount between the trusts’ share prices and their underlying asset values, a common goal in campaigns targeting closed-end investment vehicles.
