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American activist Saba Capital failed in its attempt to oust the board of directors of Herald Investment Company, and struck the first blow. In her campaign Against seven closed companies listed in the UK.
A majority of Herald shareholders on Wednesday voted against the US hedge fund's proposal to replace the fund's board and appoint its nominees, which could have paved the way for Saba to become an investment manager.
More than 65 percent of the votes were against Saba's plans, according to a Herald newspaper advertisement in the market. Aside from the vote for Saba, which represented nearly 35 percent, another 0.15 percent were in favour.
Andrew Joy, chairman of Herald Investment Trust, said the result represented a “clear, complete and indisputable refutation of Saba’s attempt to control your company and change its strategy against the wishes and interests of non-Saba shareholders”.
Joy said shareholders invested in Herald because they wanted to support smaller technology companies over the long term, noting that they “did not want to be deprived of the opportunity to enjoy more of the same” and “did not invest in Herald to become part of a short-term trading strategy.”
SABA led by activist investor Boaz WeinsteinLast month, he called shareholder meetings at seven London-listed investment funds, claiming their boards had not held managers to account for poor performance.
The campaign represents one of the biggest ever changes to the 150-year-old UK investment funds industry, which manages £266bn.
Saba's defeat before the Herald board comes just one day after the hedge fund He agreed to stop Its activist battle is against 50 BlackRock funds against a tender offer in two of them.
A large portion of the Herald's shareholders are institutional investors such as wealth managers, with individuals accounting for less than a fifth of the register.
But the investment fund industry has warned that individual investors, who represent a larger proportion of the shareholder base of the other six funds, are less involved in voting than institutions.
“This is just the first battle in the war against seven trusts,” said Jonathan Simpson Dent, chairman of Edinburgh Worldwide, another trust targeted by Saba, and warned that “shareholders cannot be complacent.”
The UK financial regulatory body has Contacted investment platforms To ensure that individual investors are aware of upcoming votes.
Saba's stakes in each fund range from about 19 to 29 percent and total £1.5 billion.
Saba said in a statement that it “remains committed to putting shareholders' interests first, delivering returns for UK investors and ultimately rehabilitating this collapsing sector.”
“We urge shareholders of the other six trusts where we have requested general meetings to support Saba’s decisions in order to put these trusts on the path towards meaningful value creation,” she added.
