- Founder of Saba Capital pushing for huge shake-up at seven trusts
- Boaz Weinstein to set out his plans to ‘deliver shareholder value’ at the trusts
- Saba has proposed to replace directors with its own nominees
Hedge fund boss Boaz Weinstein will this week set out his plans to become a ‘white knight’ for Britain’s investment trusts – amid growing opposition in the City.
The founder of New York-based Saba Capital, is pushing for a huge shake-up at seven of the trusts, which hold stocks, bonds and assets on behalf of investors.
He will host a call tomorrow to set out his plans to ‘deliver shareholder value’ at the trusts, which have a combined market value of around £4billion.
Saba has proposed to replace directors with its own nominees, saying they have failed shareholders and made poor choices.
But some of the group’s fund managers – including Baillie Gifford, whose US Growth Trust is among those being targeted – said Saba’s strategy lacks detail.
It could mean investors end up holding a stake in a portfolio very different from the one they first signed up for, they claim.
Determined: Hedge fund boss Boaz Weinstein is pushing for a huge shake-up at seven of the trusts, which hold stocks, bonds and assets on behalf of investors
But Weinstein has said he will combine the trusts’ assets and selling holdings in highly-valued US stocks to buy shares in UK firms and other British trusts.
‘We’re the white knight,’ Weinstein told the Financial Times.
‘We’re not the American taking assets to the US, we’re coming to help small UK investors.’
But James Budden, a director at Baillie Gifford, told the FT it was ‘twisted logic’, and would mean ‘fewer companies and less assets invested and less options and choices for investors’.
The Association of Investment Companies (AIC), which represents the sector, said there were unanswered questions before investors vote on the changes.
AIC chief executive Richard Stone voiced concerns that ‘shareholders such as Saba’ could have a ‘disproportionate influence’ because retail investors tend not to vote.
Some shareholders have already declared opposition, including Evelyn Partners, which holds a 5 per cent stake in the US Growth fund and a 1pc stake in Herald Investment Trust – another of those targeted.
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