Trust chiefs step up attack on US activist as one warns of an attempted ‘asset grab’

The fightback among investment trusts against an attempted coup by a US hedge fund intensified last night as one warned of an attempted ‘asset grab’.

James Williams, chairman of The European Smaller Companies Trust, told the Mail he was ‘very surprised’ to have been targeted by Boaz Weinstein’s firm Saba Capital.

The trust is one of seven under siege from Weinstein, 52, who is pushing for a shake-up that would see directors replaced by him and his allies.

‘We’ve got very good governance and a fully independent board, they’re all proper individuals who are doing a good job, and our performance has been top of the class. So we were quite surprised to be targeted,’ Williams said.

‘I think it’s clear that they’re targeting us because we have a large retail shareholder base who they hope won’t vote and that’ll allow them to take control of the company. So I think it’s a sort of an asset grab.’

CQS Natural Resources Growth and Income, another trust in Weinstein’s crosshairs, called on investors to vote against proposals put forward by Saba to replace its directors.

Chairman Christopher Casey said: ‘Saba’s proposals are without merit, introduce new and significant risk to your investment and are not in the best interests of all shareholders.’

He also said Saba’s claims of the trust’s underperformance were ‘misleading’ and branded the proposals ‘self-interested.’

CQS investors are due to vote on Saba’s proposals at a meeting scheduled for February 4.

Overall, Saba is calling for a shake-up of seven London-listed investment trusts which collectively have a market value of around £4billion. 

On Monday, Karen Brade, chairman of Keystone Positive Change, one of the targeted trusts, said the group was ‘appalled’ by Saba’s move, accusing Weinstein and his firm of ‘acting opportunistically’ and trying to ‘seize control of the board without a controlling shareholding, to pursue its own agenda.’

Saba was swift to respond, accusing Brade of overseeing ‘a staggering loss and destruction of wealth’ for investors. 

Another trust under pressure from Saba, Baillie Gifford US Growth, accused Weinstein of trying to ‘subvert’ its performance.

Evelyn Partners last night became the first shareholder to declare its opposition to Weinstein’s plans.

The group said it will vote against the proposals at Baillie Gifford US Growth, where it is the fourth largest investor with a 5 per cent stake, and at Herald Investment Trust, where it holds 1 per cent.

Card shark’s London gamble 

Power couple: Weinstein with his ex-wife

Little is known about Boaz Weinstein in the UK, but the US activist has certainly sounded a loud wake-up call for the traditionally sleepy investment trust industry, writes Tom Watkins.

The 52-year-old chess master and card shark likes to boast how the Barracuda casino in London once banned him for card counting while he played blackjack. He is also an accomplished poker player, having apparently once won a Maserati sports car during a tournament.

Having taken up chess at the age of five, he became a Life Master at 16. Last month, he drew against five-time world champion and world No 1 Grandmaster Magnus Carlsen.

Weinstein has now set his sights on another gamble – taking over seven London-listed investment trusts through his investment vehicle Saba Capital amid fierce opposition from trust managers and some major investors. 

Born in New York in 1973, Weinstein is a well-known figure on Wall Street after working at wealth manager Merrill Lynch and becoming the youngest ever managing director at Deutsche Bank in 2000 at the age of 27. H

e left to set up Saba Capital Management in 2009, taking 15 members of his former team with him.

Saba is the Hebrew word for ‘grandfather,’ and a tribute to Weinstein’s grandfather, a survivor of the Warsaw Ghetto during the Second World War.

He married Tali Farhadian, a New York District Attorney, in 2010 but the couple divorced last September.

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