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Chief executive Janus Henderson criticized a US hedge fund that is trying to take over the management of seven UK investment trusts, calling it “very aggressive”.
Ali Dibaji, who heads the $382 billion asset management firm, said Boaz Weinstein’s Saba Capital was looming large in an attempt to run the trust “by taking advantage of management fees.”
Saba Capital has acquired shares in seven trusts, two of which are controlled by Janus Henderson, and is seeking shareholder consent to overhaul the board and install its own nominees. are.
Mr Dibagi told professional investors at the Janus Henderson UK Investment Conference in London on Wednesday: “If you haven’t seen what’s happening in the UK mutual fund world today, you should tell your customers I want you to pay attention to me on my behalf.”
“You are so small that you have a very aggressive personality. . . . A hedge fund (that) comes in and bets that you and your customers won’t vote, and puts those funds away. I decided to take over and use the management fee.
“They are betting on complacency. Please don’t become complacent and don’t let them take over.” He said the entire UK investment trust sector, worth £266 billion, was effectively “under attack. “It has been done,” he added.
Saba Capital said: “All these trusts have board members who are part of this ecosystem… What are they collecting fees from pensioners for? They are supposed to work for you, the shareholders. and they themselves are placed in other trusts trading at similar discounts.
“We’re here to repair this broken trust. . . . It’s a broken industry that can’t grow.”
Saba added that the company is one of the world’s largest backers of mutual funds and similar products, with $6.6 billion invested.
Dibagi’s comments come as Sabah’s camp faces a backlash. The trust, which also operates Baillie Gifford, Herald Investment Management and Manulife, has raised concerns about Saba’s plans to put its own candidates on the board.
Mr Saba has focused on the performance of the seven trusts and the fact that their share prices have lagged asset values.
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The trusts involved are Baillie Gifford US Growth, CQS Natural Resources Growth & Income, Edinburgh Worldwide Investment, European Smaller Companies, Henderson Opportunities, Herald Investment, and Keystone Positive Change. Hedge funds hold between 19% and 29% of each trust, totaling £1.5bn.
Britain’s investment trust industry has come under pressure from rising interest rates, regulation and a focus on fees, with some investors pulling out.
“Not only is it time to erect barricades against grossly opportunistic attacks, but it’s also a time for industry self-reflection,” said Alan Brierley, an analyst at Investec.
