Activist hedge fund Saba Capital Management, led by Boaz Weinstein, has escalated its campaign targeting underperforming UK investment trusts, signalling a broader push to reform the sector, according to a report by Reuters.
The report cites Weinstein as revealing plans to call general meetings for four trusts to propose transitioning them from closed-ended structures to open-ended ones.
Speaking at a London School of Economics conference on Monday, Weinstein criticised the performance of seven UK investment trusts, describing their results as ranging from “underwhelming” to “disastrous.” He now aims to overhaul four of these trusts — CQS Natural Resources Growth & Income PLC, European Smaller Companies Trust PLC, Middlefield Canadian Income, and Schroder UK Mid Cap Fund — by advocating for an open-ended structure.
“If investors want to stay in the investment trust, good for them, but investors should have the option,” Weinstein said, emphasising the need for greater flexibility in how shares are issued and redeemed.
Weinstein’s campaign has faced resistance from both shareholders and trust managers. Six of the seven targeted trusts have already voted against Saba’s initial proposals, which ranged from investor buyouts to board overhauls. The final trust, Edinburgh Worldwide, is set to vote on Friday.
The Trusts have pushed back against Saba’s actions, calling the campaign opportunistic and not in the best interests of broader shareholders. Richard Stone, Chief Executive of the Association of Investment Companies (AIC), on Monday highlighted Saba’s shift in strategy but called for more specifics on how the proposed structural changes would benefit investors.
