Trusts are stepping up attacks on Saba, claiming fees under the US hedge fund could skyrocket
The head of an investment fund under siege by a US hedge fund said there is “no evidence” it could be better run if the activist were to succeed.
Jonathan Simpson-Dent, chairman of the FTSE 250 Edinburgh Worldwide Investment Trust (EWIT), questioned whether Saba Capital had any “experience” with early stage investments or regulatory approval to run the UK-listed entity .
Analysts also warned that as many as 17 other trusts in the London market could be targeted if Saba were to take control of seven companies in the coming weeks.
Saba, led by Wall Street financier Boaz Weinstein, has proposed replacing the directors of the seven trusts with its own nominees, saying the leaders have “let down the shareholders” and made bad decisions.
Today he will explain his plans in an online meeting.
But in a letter to Weinstein, Simpson-Dent questioned the credentials of Jonathan Zucker, an ex-lawyer and investment manager nominated to lead EWIT along with Saba portfolio manager Paul Kazarian.
Activist: Saba, run by Wall Street financier Boaz Weinstein (pictured), has proposed replacing directors of the seven trusts with its own nominees
He also raised questions about how much Saba would charge in fees if they took over the trust, saying it appeared the fees could be “as much as eight times higher” than EWIT’s current fee.
Simpson-Dent told Weinstein ‘we have seen no evidence that’ supports claims that Saba would be ‘better placed to manage Edinburgh Worldwide’.
Opposition to Saba’s plans is growing as Weinstein prepares to outline his strategy for the seven trusts should his campaign succeed.
Analysts at estate agent Peel Hunt warned that the impact of Saba’s campaign on the UK investment trust sector ‘should not be underestimated’.
“If Saba is successful in one or more of its current activist strategies, it will likely provide more firepower to build dominant shares in other trusts for similar activist campaigns,” they said.
The broker also pointed out that in addition to the seven trusts targeted, Saba also had ‘material’ interests in seventeen other trusts.
Analysts at investment bank JP Morgan also weighed in on Saba Capital’s arguments yesterday, saying that almost all of the directors the firm had proposed to run the target companies had ‘little to no experience of UK-listed investment trusts and the regulatory regime’ .
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