Saba Capital eyes $500m for activist UK investment trust fund
Over the past 12 to 18 months, the firm has been taking positions in multiple UK investment trusts, including European Opportunities, Henderson Opportunities and Schroder UK Mid Cap.
The vehicle, which follows what is known as a closed-end fund arbitrage strategy, will take leveraged long positions in around 20 UK investment trusts, with the aim of narrowing their discount to net asset value through activism, according to a person familiar with the matter.
The new strategy, which originally targeted 1 September for its launch date, is the second iteration of the firm's CEF Special Opportunities fund, which launched in April this year. Investment Week understands Saba Capital is currently growing a $3bn long exposure in UK investment trusts.
According to people familiar with the matter, the firm believes the strategy is supported by the sustained deep discounts faced by investment trusts and the UK's governance framework. About 20% of Saba Capital's portfolios are invested in UK investment trusts, Investment Week understands.
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Saba Capital Management was founded by prominent US hedge fund manager Boaz Weinstein, former co-head of global credit trading in Deutsche Bank, in 2009. The firm is known for its activism, where it may engage with companies to unlock shareholder value.
The company began investing in trusts and closed-end funds in 2013. In recent years, it has publicly challenged management groups, including BlackRock, after taking positions in US closed-end funds to monetise their discount to NAV.
Over the past 12 to 18 months, the firm has been taking positions in multiple UK investment trusts, including European
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