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The chief executive of Janus Henderson has criticized a US hedge fund trying to manage seven UK investments as “too aggressive”.
Ali Debaj, who heads the $382 billion asset manager, said Boaz Weinstein’s Sabah Capital was trying to run Ammars “to take advantage of management fees.”
It has the capital of Sabah. It is taken in seven trusts – The two are managed by Janus Henderson – and will seek shareholder approval to reform their boards and install his own candidates.
Debage told professional investors at the Janus Henderson UK investment conference in London on Wednesday: “If you are not seeing what is happening in the UK investment trust world today, please pay attention on behalf of your clients.”
“You are a little, very aggressive for no reason. . . A hedge fund (that) has come in and decided to bet on you and your clients not voting, to control those funds, to use management fees.
“They are playing recklessly. Please, please, don’t ignore them, don’t let them take over. The overall £266bn UK investment trust sector is “under attack”, he added.
Saba Capital said: “All these trusts have board members who are part of this ecosystem. . . Why take payments from pensioners? They are supposed to work for you, the shareholders, and they themselves are sitting on other trusts trading at the same discount.
“We are here to restore this broken set of trusts and . . . A broken industry that failed to grow.”
Saba added that she is one of the biggest supporters of investment trusts and similar products by investing 6.6 billion dollars.
Debugging comments will come The Sabah campaign faced a backlash.. The trust, managed by Baillie Gifford, Herald Investment Management and Manulife, has raised concerns over Saba’s plans to put its own candidates on the board.
ShareSoc, an industry body for individual investors, also said on Wednesday it was “strongly opposed” to Saba’s proposals. Mark Northway, director of ShareSoc, said the activist plans “reveal a lack of independent governance and the exploitation of fiduciary investment mandates by kinship and leverage.”
Saba focused on the performance of the seven trustees and the fact that their stock prices lagged behind their assets.
The trusts he is targeting are: Bailey Giffords US Growth, CQS Natural Resources Growth and Income, Edinburgh International Investments, European Small Companies, Henderson Opportunities, Herald Investments and Keystone Positive Change. The hedge fund’s stakes range from 19 to 29 per cent of each, with a total value of £1.5bn.
The UK investment trust industry has been under pressure from high interest rates, regulation and a focus on fees, which has caused some investors to leave.
Investec analyst Alan Briley said: “Now is the time to put barriers in place to protect against malicious and opportunistic attacks, but for some industries to be self-reflective.”
