10th Feb 2025 18:22
(Alliance News) - Saba Capital Management LP on Monday said it intends to requisition general meetings at four trusts, targeting proposals for liquidity at net asset value and the transition of the trusts to open-ended funds.
The four trusts called out were CQS Natural Resources Growth & Income PLC, European Smaller Cos Trust PLC, Middlefield Canadian Income PCC and Schroder UK Mid Cap Fund PLC.
Saba believes "it is apparent" that shareholders at all four trusts "have been trapped in closed-end vehicles trading at deep discounts for years".
"In our view," Saba said, "the necessary solution is to roll or convert these trusts into open-ended funds, which by definition trade at NAV and are free of the structural issues that plague closed-ended funds."
The requisitioned meetings come on the back of Saba's attempt in December to oust the current boards of seven investment trusts, which Baillie Gifford US described in early February as "self-serving and destructive".
Both CQS Natural Resources Growth & Income and European Smaller Cos Trust were targeted in December, too.
Shareholders at six of the trusts have so far rejected Saba's proposals, with Edinburgh Worldwide Investment Trust PLC still due to hold a vote at a general meeting on Friday.
Saba Founder & Chief Investment Officer Boaz Weinstein said: "While we acknowledge that shareholders were not ready to fully replace the boards with new directors, it was clear from our conversations that many investors agree with Saba on one crucial point: the importance of the option for liquidity at NAV."
Shares in CQS Natural Resources Growth & Income closed up 3.1% at 198.00 pence each in London on Monday. Shares in European Smaller Cos Trust closed up 1.1% at 180.40p, shares in Middlefield Canadian Income closed down 0.4% at 118.00p, and shares in Schroder UK Mid Cap Fund closed up 3.7% at 624.00p.
The trusts had not yet issued responses at the time of equities close on Monday.
By Emily Parsons, Alliance News reporter
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