Second major fund manager joins calls for shareholders to reject the coup on Saba
Janus Henderson has joined his rivals in urging investors of his London-listed investment funds to reject a takeover attempt by US hedge fund Saba Capital.
The group, which has $382.3 billion in assets under management, told shareholders about this European smaller companies And Henderson odds Trusts will vote against the resolution tabled by Saba in the polls to be held on February 5 and 4 respectively.
It follows a £225 billion intervention to asset manager Baillie Gifford, which urged investors from the US Growth Trust, Keystone Positive Change and Edinburgh Worldwide to reject Saba’s resolutions.
Saba hopes to take control of seven London-listed trusts in which it has built up substantial interests. Efforts to overhaul the governance of each fund will be followed by resolutions to appoint themselves as investment managers.
The US company has highlighted deep discounts to net asset value and performance issues affecting each trust, accusing the respective boards and management of failing to take sufficient action.
The boards and management of the affected trusts have accused Saba of self-interest and cherry-picking data to support its claims, pointing out that performance has improved and discounts have declined significantly.
Saba is preparing for a shareholder confrontation with the boards of seven London-listed investment funds next month
Boards have also pointed to the relatively high fees charged by Saba’s publicly available funds.
James Williams, chairman of Janus Henderson’s European Smaller Companies Trust, highlighted his fund’s long-term “outperformance” on Wednesday and warned shareholders that Saba is trying to remove a “highly qualified, independent board that acts in the interests of all shareholders.”
According to the Association of Investment Companies, shares of European smaller companies have returned 18.9, 74.4 and 257.7 percent over one, five and ten years respectively.
It has outperformed average returns among peers in the AIC’s European smaller companies sector of 12.4, 37.6 and 172.2 percent respectively over the same periods.
The trust is at a 2.1 per cent discount to net asset value, having fallen significantly from around 13.5 per cent at the start of 2024.
Williams added: “It is clear that Saba’s motives are self-interested. It would like to appoint directors who are not independent of the company’s largest shareholder and has indicated that it may appoint itself as an asset manager.
‘This could jeopardize shareholder protection, radically change the company’s investment risk profile and deprive investors of the opportunity to benefit from the proven European small cap investment strategy.
‘The Board of Directors therefore recommends that shareholders vote against the proposed resolutions.’
He also reiterated warnings from Keystone’s board that “Saba is counting on a large portion of shareholders not voting,” adding that “investor participation is critical and will determine the future of the company.”
Echoing Keystone, chairman of Henderson Opportunities Trust Wendy Colquhoun told shareholders that Saba’s resolutions could cost them a lot of money if implemented.
Henderson Opportunities has offered investors the chance for a full cash exit at NAV or the option to switch to an open-end fund – Janus Henderson UK Equity Income & Growth – as the trust prepares for liquidation.
Colquhoun warned: ‘If Saba succeeds, this offer risks being canceled without a comparable alternative.
‘Saba is trying to take control of the company without certainty about what will happen to shareholders’ investments.
‘Saba wants to abolish a strong and highly qualified independent board that acts in the interests of all shareholders and replace it with its own, non-independent board that can put Saba’s interests first.
‘The message from the board to the shareholders is clear: please cast your vote and do not let Saba take unnecessary risks with your money.’
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