The hedge fund boss claims he will be a ‘white knight’ for investment funds

Hedge fund boss Boaz Weinstein will this week set out his plans to become a ‘white knight’ for the UK’s investment funds – amid growing opposition in the city.

The founder of New York-based Saba Capital is calling for a major shake-up at seven of the trusts, which hold stocks, bonds and assets on behalf of investors.

He will make a call tomorrow to set out his plans to ‘deliver shareholder value’ at the trusts, which have a combined market value of around £4 billion.

Saba has proposed replacing directors with its own nominees, saying they have let down shareholders and made poor choices.

But some of the group’s fund managers – including Baillie Gifford, whose US Growth Trust is among those targeted – said Saba’s strategy lacks detail.

It could mean investors end up holding a stock in a portfolio that is very different from the one they initially signed up for, they argue.

But Weinstein has said he will combine the trusts’ assets with selling stakes in highly valued U.S. stocks to buy shares in British companies and other British trusts.

“We are the white knight,” Weinstein told the Financial Times.

‘We are not the American bringing assets to the US, we are coming to help small British investors.’

But James Budden, director at Baillie Gifford, told the FT it was “twisted logic” and would mean “fewer companies and fewer assets invested and fewer options and choices for investors.”

The Association of Investment Companies (AIC), which represents the sector, said there are unanswered questions before investors vote on the changes.

AIC CEO Richard Stone expressed concern that “shareholders like Saba” could have “disproportionate influence” because private investors typically do not vote.

Some shareholders have already expressed opposition, including Evelyn Partners, which has a 5 percent stake in the US Growth Fund and a 1 percent stake in the Herald Investment Trust – also one of the targets.