A US activist trying to take over seven London-listed investment funds is “betting on complacency” from thousands of retail shareholders to secure victory, a fund manager said.
Saba Capital wants to replace the board of the trusts with its own nominees.
The hedge fund, run by Wall Street financier Boaz Weinstein, has convened meetings at seven companies – 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 growing in the industry that low turnout among private investors who own shares in the trusts will hand Saba the win.
At an investment conference yesterday, Ali Dibadj, CEO of Janus Henderson, which runs two of the trusts, said: ‘An insignificantly small, very aggressive hedge fund has come in and decided to bet that you and your clients are not going to vote, to vote on these funds, to to benefit from the management fee.
‘They’re betting on complacency. Please don’t be complacent, don’t let them take over.’
Uproar: Saba Capital, run by Wall Street financier Boaz Weinstein (pictured), aims to oust the trusts’ boards and replace them with their own nominees
The comments came as the head of a group representing the investment trust industry said private investors must “act quickly” if they want to have a say in the outcome.
Although Saba has stakes in each company ranging from 19 percent to 29 percent, the trusts also have large numbers of private investors whose votes will prove crucial in determining the outcome.
To succeed, the American company must receive at least 50 percent support from voting shareholders.
The result is that 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, which will take place on Wednesday, investors must register to vote at the platforms by the end of tomorrow.
“If you are a shareholder in one of these trusts, time is running out to vote,” Stone said. ‘Shareholders must act now.’
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