Two UK investment trusts managed by Janus Henderson have urged shareholders to reject a proposal from Saba Capital Management to replace their entire boards, claiming it would effectively hand control to the US-based activist hedge fund, according to a report by Reuters.
Saba, led by Boaz Weinstein, announced plans last month to overhaul the boards of seven UK investment trusts, citing performances it described as ranging from “underwhelming” to “disastrous.” As part of the proposal, Weinstein has nominated himself to the board of the Baillie Gifford US Growth Trust and put forward Paul Kazarian, a Lead Portfolio Manager, for the boards of the other six funds.
The Henderson Opportunities Trust (HOT) and the European Smaller Companies Trust (ESCT), both managed by Janus Henderson, were the latest to call on shareholders to oppose Saba’s resolutions, with Wendy Colquhoun, Chair of the HOT board, expressing concerns over the uncertainty and risk posed by Saba’s proposals.
“The resolutions carry significant uncertainty and risk,” Colquhoun said, adding that HOT already offers shareholders the choice of a full cash exit at net asset value (NAV) or the option to roll over into an open-ended fund managed by Janus Henderson.
Similarly, James Williams, Chair of ESCT, criticised Saba’s motives as “self-serving” and emphasised the trust’s opposition to the proposed changes.
In an emailed response to Reuters, Saba dismissed the criticisms, stating: “Janus Henderson’s proposed reconstruction scheme for HOT is inferior to our nominees’ plan, and their claim that Saba would seek higher fees at shareholders’ expense is made up.”
