Latest news with #SabaCapital
Daily Mail
31-05-2025
- Business
- Daily Mail
JEFF PRESTRIDGE: There ARE simple ways for trusts to boost their shares
Investments trusts are a super way for investors to get long-term exposure to stock markets – and make some money along the way. They're easy to buy and sell, and most provide value for money. Yet they are not without flaws, as predators such as American hedge fund manager Saba Capital have sought to exploit. The biggest one is that as funds listed on the London Stock Exchange, their share prices do not always reflect their underlying asset value. In most cases, they undervalue them. In investment speak, they trade at a discount. When this happens, shareholders see the worth of their investments eroded. It's frustrating. The average discount industrywide is currently about 15 per cent. Trust shares trade at discounts for many reasons: out of vogue investment mandates; an unappealing stock market (as London has been for quite a while); and an unfriendly economic and financial backdrop. Yet underpinning all these reasons is a mismatch between buyers and sellers. More investors want out than in. Saba has sought to make money from this by buying stakes in undervalued investment trusts and then agitating for change. So far it hasn't managed to take any trusts under its wing, but it has helped close discounts on some trusts, making money in the process. A few days ago I spoke to Richard Curling, chairman of trust Montanaro European Smaller Companies (MESC), about discounts. The £277 million trust has Saba among its shareholders. Curling says investment trusts must do more to reduce the 'volatility' in share price discounts. At MESC, he has implemented a three-prong strategy designed to drive down the trust's discount. It has involved buying back shares (in effect reducing their supply to make them scarcer); allowing investors twice a year to exit the trust at close to asset value; and reducing the annual charge from 0.9 to 0.825 per cent. Although early days, it's working. The trust's discount is now 8 per cent, more than half what it was in November last year (Saba has taken advantage of this to trim its stake). And unlike many other trust chairs, Curling has a bit of get up and go about him. Curling believes the investment trust industry needs to do far more to attract investors – young and old – something which would help drive down discounts. His ideas include the use of social media to get younger people interested in investing, and the removal of jargon from key literature such as annual reports. He adds: 'We must present our case better to potential investors. Plain English, not jargon.' Curling is bang on the nail. Although stellar investment performance will always be the number one priority for investors (MESC's share price is up 17 per cent over the past year), investment trusts must become more relevant to today's investors. Otherwise there is a danger many will be undermined by discounts. On a related issue, the industry's flag waver, the Association of Investment Companies (AIC), is calling for a change in UK company law that would ensure more trust shareholders vote on key issues, such as a trust's discontinuation or takeover. Currently, many shareholders are thwarted from voting because the platform they hold their investments with don't pass on details. The AIC has launched a petition on this issue. It needs 10,000 signatures for the Government to respond ( As a fan of trusts and investor empowerment, I've put my name to it, as have 1,798 other people. Are there 8,202 lovers of investment trusts out there who will get the petition to the next step? I do hope so. Leave Gift Aid alone, Rachel Gift Aid is a financial lifeline to many charities left battered and bruised by Chancellor Rachel Reeves's recent hike in employer National Insurance costs. It boosts the coffers of 66,000 charities by £1.6 billion a year. This month, I am doing two Race For Life runs for fabulous charity Cancer Research UK – a 5km event in London's Battersea Park, followed by a 10km run in glorious Worthing, West Sussex (I have a thing about piers). So far, Gift Aid, a 25 per cent top-up on donations, has increased my fundraising by more than £180. So, Rachel, I know you've made a pig's ear of the country's finances, but please leave Gift Aid alone come the Autumn Budget. You've hit charities once in the pocket. Twice would be cruel beyond cruel. Rachel de Vil. Watch out for your bank sneakily dropping chip and pin payments Like many readers, retired teacher Moira McCormick isn't a fan of new banking technology. She prefers cards that require a personal identification number (PIN) to contactless. 'It provides me with a layer of financial protection,' she says. But recently she used her card to pay for parking at her local Banbury railway station, only for the payment to be completed without requiring a PIN. Worried that anyone could use her card to pay for parking if she were to lose it, she contacted Chiltern Railways (operator of the car park) for an explanation. She was told that Mastercard and Visa have informed the company which provides the payment service for Chiltern's ticket machines that 'insecure unencrypted PIN validation' was no longer permitted. She was told to contact her card issuer (HSBC) for a replacement that asks for PIN verification. Chiltern informed her that some cardholders with Lloyds and Royal Bank of Scotland (NatWest) were also affected. 'I was told the change is meant to improve the security of my card,' says Moira, 'but it's now less secure. Anyone could use it if I lost it.' Indeed, when sales director Bradford Bines, from Leigh-on-Sea in Essex, lost a card in a Manchester car park, he later discovered it was fraudulently used 29 times by exiting drivers. HSBC insisted that changes to the technology were designed to make cards 'more secure from criminals trying to steal data'. Moira's non-PIN payment, it said, was deemed to be 'low value and low risk', adding: 'A decision was made to approve this payment without a PIN for the convenience of the customer.' Moira isn't happy. She says HSBC should have informed her that some payments would no longer require a PIN. Fair point.
Reuters
28-05-2025
- Business
- Reuters
Hedge fund Saba reaches agreement with another investment trust target
LONDON, May 28 (Reuters) - Activist hedge fund Saba Capital Management has reached a restructuring deal with another of the UK investment trusts it has targeted in a longstanding campaign to achieve higher returns. Saba said on Wednesday it had agreed with CQS Natural Resources Growth & Income (CYNL.L), opens new tab that the investment trust will offer investors a cash exit for their shares at full value, or if enough investors stick with the fund, it will raise dividends and lower management fees. Five of nine UK investment trusts have voted to restructure or liquidate this year because of Saba's $5.5 billion activist campaign that targeted UK investment funds. Saba Capital Management, founded and run by Boaz Weinstein, began the campaign in 2024 to overhaul seven close-ended investment trust boards over performance, adding more funds in February. Investment trusts hold a range of stocks and because of the costs of running them, funds' shares can trade at a discount to their net asset value (NAV). Weinstein first demanded that the trusts vote to give Saba board seats so the hedge fund might run those funds. But shareholders rejected this and more than half have now decided instead to restructure. Saba's CEF Opportunities 1 fund is up 5.11% in May and down 0.76% for 2025 so far, said HSBC data seen by Reuters. Here is the latest campaign update: "This outcome gives CYN (CQS Natural Resources Growth & Income) shareholders a clear choice: full liquidity at NAV or the opportunity to stay invested in a trust with a higher dividend and a reduced management fee. It's a true win-win," Weinstein said in a statement. Yet some investors like these discounts and restructuring means a loss of opportunity, like catching the funds at a cheap moment and collecting dividend payments. "Discounts to NAV are not always bad," said Chris Barter, an investment trust investor. "If you're an income investor buying an investment trust at a 15-25% discount, you'll achieve a yield which mutual funds and ETFs simply can't reach."
Daily Mail
24-05-2025
- Business
- Daily Mail
JPMORGAN EUROPEAN DISCOVERY TRUST: Hidden gems driving healthy profits
Investment trust JPMorgan European Discovery has been through the wars recently, yet this smaller-companies fund now seems back on track. Last year, poor performance against its benchmark index and a struggling share price attracted the attention of trust predator Saba Capital which, at one stage, had a 13 per cent stake in the business. But the board of the stock market-listed fund headed off potential trouble by making changes. While keeping JP Morgan Asset Management as investment managers, it demanded a shake-up of the team. This meant the departure of long-standing managers Francesco Conte and Edward Greaves, and the arrival of Jules Bloch, Jack Featherby and Jon Ingram. So far, the change has worked with the £543 million fund having a good past year, delivering total returns of 16 per cent. To put this figure into perspective, its peer group has generated an equivalent gain of 11 per cent. Just as importantly, Saba seems to have lost interest in the trust, reducing its stake to 4.5 per cent. Some shareholders also took the opportunity of a tender offer late last year to redeem their holdings on favourable terms. Bloch insists that the trust's focus on European smaller companies enables him and his two colleagues to make money from an 'exceptional asset class'. It invests in a universe comprising companies with market capitalisations of between €450 million (£380 million) and €10 billion (£7.45 billion). 'The trust has no UK stocks,' he says, 'and there are no constraints in terms of its exposure to specific sectors or countries across Continental Europe. We are able to discover some hidden gems which many investors haven't heard of before – and in turn are hugely profitable and can grow.' He adds: 'When companies break through €10 billion we will run with them although we would sell if their market capitalisations approached €15 billion.' Italian bank Unipol Gruppo, a top-ten fund holding, fits into this category. Although there are three managers at the trust's helm, they're assisted by heaps of quantitative analysis. This sifts the trust's 2,600 company-strong universe, discarding un-investible stocks (not liquid enough) and ranking companies according to tried-and-tested investment criteria: value, quality and (share price) momentum. The top 400 form the pool from which the team select stocks for the trust's portfolio. Currently, the fund comprises 78 holdings with the biggest position in French technical company SPIE at 3 per cent. 'We work as a team,' says Bloch. 'We sit together, have regular Monday meetings, and if we disagree about the merits of a potential new holding, then we tend to opt for the stake recommended by the least enthused.' He adds: 'What I love about the companies we invest in is that many are mature businesses which are growing.' Among them is Puuilo, a Finnish DIY chain. 'It has 45 stores,' he says, 'and it wants to get to 75 by opening a new one every two months. It is well managed and while in growth mode it's keen to return cash to shareholders.' The trust, formed 35 years ago, changed its name four years ago – from European Smaller Companies. Although the investment focus is very much on capital growth, it does pay a dividend. In the last full financial year, it distributed income of 10.5p a share – paid half yearly – with the shares currently trading at around £5.37. The stock market identification code is BMTS0Z3 and the market ticker is JEDT. Annual charges total 0.92 per cent.
Reuters
08-04-2025
- Business
- Reuters
Boaz Weinstein's Saba Capital sells stake in UK trust Keystone Positive Change
April 8 (Reuters) - U.S. activist investor Boaz Weinstein's Saba Capital has sold its nearly 30% stake in British investment trust Keystone Positive Change (KPC) (KPCAa.L), opens new tab, a regulatory filing showed on Tuesday. The Baillie Gifford-run investment trust is undergoing a planned liquidation under which shareholders have the option of a cash exit or the opportunity to roll over into another Baillie Gifford managed fund. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. The filing on Tuesday showed that on March 28, Saba Capital management's voting rights in KPC dropped to nil, from about 29.65%, but did not disclose any other transaction details. KPC was one of seven targets of Saba in the UK, where it was waging a campaign to overhaul their boards over performance it labelled as "underwhelming" and "disastrous". In December, the U.S. hedge fund sought to overhaul the boards of the trusts but six of the seven trusts, including KPC, rejected its proposal and publicly hit back at Saba Capital, calling its efforts opportunistic and not in the interests of broader shareholders. KPC was already in the process of winding itself down after a long bout of underperformance, and announced plans to go ahead with the liquidation after shareholders rejected Saba's attempted efforts to gain control.
Yahoo
08-04-2025
- Business
- Yahoo
Boaz Weinstein's Saba Capital sells stake in UK trust Keystone Positive Change
(Reuters) - U.S. activist investor Boaz Weinstein's Saba Capital has sold its nearly 30% stake in British investment trust Keystone Positive Change (KPC), a regulatory filing showed on Tuesday. The Baillie Gifford-run investment trust is undergoing a planned liquidation under which shareholders have the option of a cash exit or the opportunity to roll over into another Baillie Gifford managed fund. The filing on Tuesday showed that on March 28, Saba Capital management's voting rights in KPC dropped to nil, from about 29.65%, but did not disclose any other transaction details. KPC was one of seven targets of Saba in the UK, where it was waging a campaign to overhaul their boards over performance it labelled as "underwhelming" and "disastrous". In December, the U.S. hedge fund sought to overhaul the boards of the trusts but six of the seven trusts, including KPC, rejected its proposal and publicly hit back at Saba Capital, calling its efforts opportunistic and not in the interests of broader shareholders. KPC was already in the process of winding itself down after a long bout of underperformance, and announced plans to go ahead with the liquidation after shareholders rejected Saba's attempted efforts to gain control.
