A US activist trying to take over seven London-listed investment trusts is ‘betting on complacency’ from thousands of private shareholders to secure victory, a fund manager has said.
Saba Capital wants to replace the boards of the trusts with its own nominees.
The hedge fund, which is run by Wall Street financier Boaz Weinstein, has called meetings at seven firms – Herald Investment Trust, Baillie Gifford US Growth, Edinburgh Worldwide, European Smaller Companies, Keystone Positive Change, CQS Natural Resources and Henderson Opportunities – to ask shareholders to vote on its plans.
Fears are mounting in the industry that a low turnout among private investors who own shares in the trusts will hand Saba victory.
At an investment conference yesterday, Ali Dibadj, chief executive of Janus Henderson, which manages two of the trusts, said: ‘An inconsequentially small, very aggressive hedge fund has come in and decided to bet on you and your clients not voting, to take over those funds, to take advantage of the management fee.
‘They’re betting on complacency. Please, please don’t be complacent, don’t let them take over.’
Shake-up: Saba Capital, which is run by Wall Street financier Boaz Weinstein (pictured), is aiming to oust the boards of the trusts and replace them with its own nominees
The comments came as the head of a group representing the investment trust industry said private investors would need to ‘act quickly’ if they wanted to have their say on the outcome.
While Saba has stakes in each firm ranging from 19 per cent to 29 per cent, the trusts also have large numbers of retail investors whose votes will prove crucial in deciding the outcome.
The US firm needs to win at least 50 per cent support from voting shareholders to succeed.
As a result, it will win if other investors do not actively vote against its proposals.
Richard Stone, head of the Association of Investment Companies, warned that ‘time was running out’ for retail investors to register to vote through investment platforms such as AJ Bell, Hargreaves Lansdown and Interactive Investor.
For the first meeting at Herald Investment Trust, set to take place on Wednesday, investors will need to register to vote with the platforms by the end of tomorrow.
‘If you’re a shareholder in one of these trusts, time is running out for you to vote,’ Stone said. ‘Shareholders need to act now.’
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