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Two UK investment trusts have urged their shareholders to resist an attempt by a US hedge fund to take control.
Janus Henderson’s European Smaller Companies Trust, and its Henderson Opportunities Trust, both recommended that investors vote against Saba Capital’s attempt to shake-up their boards and appoint its own directors instead.
“The European Smaller Companies Trust is a well-managed investment company whose strategy has delivered long-term outperformance.
“Saba is attempting to take control of your Company by removing a highly qualified, independent board that acts in all shareholders’ interests. It’s clear that Saba’s motives are self-serving. It would like to install directors who would not be independent of the Company’s largest shareholder and has indicated that it may appoint itself as investment manager.
The cleverness of Weinstein’s campaign is that it has a chance of succeeding – perhaps not at all seven trusts, but maybe at a few. Retail investors are notoriously poor at turning out to vote and not all investment platforms make the process simple. But that is a reason for the City to wake up and make more of a protest about this attempted revolution.
To repeat, not everything is rosy in the world of investment trusts: some funds are undifferentiated and some boards aren’t sufficiently active. But investment trusts as a whole – there are 88 of them in the FTSE 250 index – are definitely worth defending against smash-and-grab merchants. If a New York hedge fund offering only thin promises to close valuation gaps can seize control of seven trusts, then the London stock market is in more trouble than we feared. Vote no to Saba.
“Across the globe, markets are increasingly protective, with aid making our industries uncompetitive. This must be addressed.
This marks the end of European complacency.”
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