Hedge Fund Manager Boaz Weinstein Launches New UK Investment Trust Campaign
In a renewed effort to reshape the UK investment trust sector, activist hedge fund manager Boaz Weinstein has initiated a campaign to restructure four closed-end trusts.
Weinstein's Saba Capital Management has called for shareholder meetings to vote on proposals to convert the trusts to open-ended structures. This move aims to eliminate the persistent discounts these trusts trade at compared to their net asset values (NAVs).
The targeted funds include CQS Natural Resources Growth & Income Plc, European Smaller Companies Trust, Middlefield Canadian Income, and Schroder UK Mid Cap Fund Plc. "Shareholders have been trapped in closed-end vehicles trading at deep discounts for years," Weinstein stated in a letter to shareholders. "The necessary solution is to roll or convert these trusts into open-ended funds, which by definition trade at NAV and are free of the structural issues that plague closed-end funds."
This latest campaign follows Saba's previous unsuccessful attempts to gain control of seven other trusts, including ESCT and CQS. Despite losing shareholder votes in most of those cases, Saba has successfully narrowed the discounts on the targeted funds since acquiring stakes in them.
The UK investment trust sector has been facing challenges due to rising interest rates, liquidity concerns, and regulatory pressures. Weinstein's high-profile campaign has drawn attention to these issues and sparked debate within the industry. While some observers question his approach, others acknowledge that it has benefited investors by reducing trust discounts.