Saba Capital: Driving Value for U.K. Investment Trust Shareholders

Saba Capital, a New York-based hedge fund led by Boaz Weinstein, has launched a campaign to deliver value to shareholders of seven U.K. investment trusts. The fund, with stakes ranging from 19% to 29% in each trust, aims to replace underperforming boards and investment managers, aiming to narrow trading discounts and improve shareholder returns. Saba's open letter to shareholders details its intent to quickly deliver substantial liquidity and long-term returns, with the campaign website, , offering updates and supporting Saba's resolutions at the general meetings.

Saba Capital's track record in U.K. investment trusts demonstrates its commitment to value creation. In 2024, the fund requisitioned general meetings for seven trusts, including Baillie Gifford US Growth Trust PLC, CQS Natural Resources Growth & Income PLC, and Keystone Positive Change Investment Trust PLC. Saba's past actions also include increasing stakes in trusts like BlackRock Smaller Companies Trust PLC and advocating for capital returns and enhanced shareholder value in European Opportunities Trust PLC.

Saba's strategy involves hedging underlying company exposure and pressuring trusts for action, with a focus on listed equity investments. By narrowing discounts to net asset value, Saba has helped create value for shareholders in these trusts. The fund's alignment of interests with other shareholders, as the largest investor in each trust, contributes to its ability to drive change. Saba's significant stake and voting power enable it to requisition general meetings and propose resolutions, acting in the best interests of all shareholders.

Saba Capital's proposed directors for the targeted trusts bring extensive experience in investment management, governance, and financial services. Key qualifications include investment management experience, board experience, financial expertise, and industry knowledge. By appointing these experienced directors, Saba seeks to enhance the trusts' governance, improve performance, and ultimately deliver substantial liquidity and long-term returns for all shareholders.

Saba Capital's campaign to deliver value to shareholders of seven U.K. investment trusts highlights the fund's commitment to improving governance and oversight in the sector. By addressing wide trading discounts to net asset value and the inability of existing boards and investment managers to deliver sufficient shareholder returns, Saba aims to create value for shareholders through skilled management and best-in-class governance. As the largest investor in each trust, Saba's alignment of interests with other shareholders enables it to drive change and deliver substantial liquidity and long-term returns for all shareholders in the targeted trusts.