Trust bosses escalate attack on US activist as one warns of attempted ‘asset grab’

The fight between investment funds against an attempted coup by a US hedge fund intensified last night when one of them 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 Saba Capital firm.

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

‘We have very good governance and a fully independent board, they are all good people doing good work and our performance has been best in class. So we were very surprised when they attacked us,” Williams said.

‘I think it’s clear that they are targeting us because we have a large base of retail shareholders who they hope will not vote and that will allow them to take control of the company. So I think it’s kind of an asset grab.”

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

Chairman Christopher Casey said: “Saba’s proposals lack merit, introduce significant new risks to its investment and are not in the best interests of all shareholders.”

He also said Saba’s claims about the trust’s poor performance were “misleading” and called the proposals “self-serving”.

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

Overall, Saba is calling for a restructuring of seven London-listed investment funds that together have a market value of around £4 billion.

On Monday, Karen Brade, president of Keystone Positive Change, one of the trusts attacked, said the group was “horrified” by Saba’s move, accusing Weinstein and his firm of “acting opportunistically” and trying to “take control of the board without a majority stake, to pursue their own agenda.’

Saba was quick to respond, accusing Brade of overseeing “a staggering loss and destruction of wealth” for investors.

Another Saba fund under pressure, 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 proposals from Baillie Gifford US Growth, where it is the fourth-largest investor with a 5 percent stake, and Herald Investment Trust, where it owns 1 percent.