American raider Boaz Weinstein is ‘selfish and wasteful’ and should give up his attacks on British investment trusts, a leading campaigner for private shareholders said this weekend.
Weinstein’s Saba Capital tried to take control of seven trusts but lost all seven votes after investors decisively rejected his assault.
Instead of backing off, Saba has revealed it now plans to table fresh votes at four more trusts.
The seven votes are estimated to have cost each affected trust hundreds of thousands of pounds in expenses, much of which will come from investors’ pockets.
Amit Vedhara, a director at ShareSoc, a lobby group for private investors, said that for Saba to keep coming back ‘time and again’ was ‘entirely selfish and wasteful of cash, management resources and every other investors’ time’. He said of the strategy: ‘It may be Machiavellian or maybe it is just making it up as it goes along. But it isn’t a very mature way of doing business.’
After being voted down at the seven trusts first targeted, Weinstein revealed he now wants to force two more trusts and two of the original targets to change their structure. They are CQS Natural Resources Growth & Income, European Smaller Companies – both original Saba targets – Middlefield Canadian Income and Schroder UK Mid Cap.
Shake-up: Saba Capital founder Boaz Weinstein with his former wife Tali
Currently, the four are closed-ended investment trusts, whose shares are traded on the stock market.
He wants them to become ‘open-ended’ so investors buy ‘units’ whose value is based on the fund’s assets.
These cannot be dealt on a stock exchange, meaning open-ended funds can be forced to sell assets if a large number of shareholders try to take money out all at once, making them less suitable for illiquid investments. In extreme cases, they can ban investors from selling, effectively locking up their money.
The Mail on Sunday has launched a manifesto to boost shareholder democracy. We want to make it free and easy for shareholders to vote, giving them the option of attending all general meetings in person; make trusts send investors information about important votes unless they opt out; axe stamp duty on purchases of UK-listed shares.
We also call on Ministers to scrap old EU rules that paint trusts’ charges in a bad light.
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