The Schroder UK Mid Cap Fund has announced a series of investor-friendly reforms after fending off an attempt by Boaz Weinstein’s Saba Capital to overhaul its structure, according to a report by This is Money.
The £204m investment trust, which holds stakes in companies such as butcher Cranswick and defence firm Babcock, was targeted last month when Saba Capital proposed converting the fund from a closed-ended to an open-ended structure. The hedge fund’s move, had it been successful, could have made it more difficult for investors to sell their shares during periods of heavy redemptions.
Although the board ruled Saba’s proposal invalid, the trust has now introduced a range of measures to enhance investor appeal, including: lower management fees to improve cost efficiency; a triennial continuation vote, giving shareholders the opportunity to decide on the trust’s future every three years; and increased share buybacks to help prevent shares from trading at a significant discount to net asset value.
Despite the timing of these changes, a spokesperson for the trust denied they were the result of negotiations with Saba Capital.
Saba Capital’s attempt to force structural change at Schroder UK Mid Cap was part of a broader activist campaign by Weinstein. In December, the hedge fund manager sought to remove the leadership of seven UK investment trusts and replace them with himself and his allies. However, those efforts ultimately failed.
