Activist investors have their place in the investment ecosystem, but sometimes a corporate action is so defining it commands the attention of shareholders and stakeholders alike. Such is the case with US activist hedge fund Saba Capital Management which, on 18 December, published an open letter that advocated radical change at seven investment trusts.
This is no idle foray. Saba has built stakes in these trusts of up to nearly 30 per cent, so it can ensure its proposals are put to the vote at forthcoming Requisitioned General Meetings – the first being on 22 January. With two of the seven companies being long-standing holdings in my 10 live investment trust portfolios, it is perhaps worthwhile highlighting aspects of Saba’s approach that we find concerning.