Activist hedge fund Saba Capital has emerged victorious in a battle to take control of a London-listed investment fund, ousting its chair and five other board members in a shareholder vote, after it sold 35% of its holdings in Elon Musk‘s SpaceX.
A Bitter Feud Over A Potential SpaceX IPO
Edinburgh Worldwide Investment Trust shareholders voted on April 30 to remove Chair Jonathan Simpson-Dent and the five other directors, to install three nominees backed by Saba Capital.
The result hands control of the firm, which is focused on growth investments in cutting-edge tech companies, to Boaz Weinstein‘s firm. The activist feud was ignited over EWIT’s decision to sell off a portion of its stake in SpaceX last year.
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According to media reports in December, EWIT had made a 950% return on its 2018 investment in a private offering of shares in Musk’s space exploration company. Saba Capital demanded transparency on the timing of the sale, ahead of a potential blockbuster IPO for SpaceX.
Saba had criticized EWIT’s sale of around 35% of its SpaceX stake in October, which they said was to support a “self-serving” merger with parent company Baillie Gifford‘s U.S. Growth Trust.
Saba Extends Its UK Revolution With Herald Deal
Saba has been targeting several UK investment funds, and its win against EWIT has led to a standstill agreement with Herald Investment Trust.
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On Thursday, the trust proposed a 66% tender offer to halt any further action from Saba, which owns a 30% stake in the fund. It was also announced that Aberdeen Investments will become the manager of Herald, with lead manager Katie Potts joining Aberdeen as part of the deal.
Saba has also agreed to similar deals regarding eight other London-listed Aberdeen investment trusts, with combined assets of $17 billion, assuming their boards agree, CNBC reported.
“This is what shareholder engagement looks like when boards act in the interests of the people they serve,” Weinstein said on Thursday. “And it is what Saba will keep demanding across the UK investment trust sector.”
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Hunting Private Credit Deals With $1B Capital Raise
Saba Capital is now looking to raise $1 billion to invest in the struggling private credit sector, Reuters reported. Saba Capital emerged as a spin-out from a proprietary team that Weinstein founded at Deutsche Bank.
Weinstein has reportedly said in interviews that he is “buying pessimism” after some high-profile losses in the sector, which brought redemption pressure from investors.
Interest in alternative and thematic investing has also fueled demand for more personalized portfolio tools. Some platforms now allow investors to create custom indexes built around specific sectors, trends or market ideas using AI-powered investing technology.
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