Predator targets investment trusts' shareholder democracy

Investment trusts have long served as a valuable tool for private savers, offering access to innovative investments with relatively small sums. These trusts embody a long-term investment approach, suitable for retirement planning. However, US financier Boaz Weinstein, operating through Saba Capital, has been aggressively targeting these trusts.

Weinstein's strategy involves attempting to gain control of targeted trusts at a low price, often disregarding the majority's dissenting opinions. His persistence has led to prolonged 'sieges' of trusts, such as Edinburgh Worldwide, where he has instigated votes to replace directors. This approach relies on exhausting opposing shareholders into capitulation.

In response, the Association of Investment Companies has urged the Financial Conduct Authority and the Department for Business and Trade to intervene. They advocate for measures like limiting repeated takeover proposals and enabling default voting with the board for small investors via platforms. Related-party transaction rules are also suggested to prevent Saba from installing directors with the aim of changing management and strategy for their own benefit.

Separately, Simon Peckham and his team have launched Rosebank, aiming to replicate their past success with Melrose. Rosebank focuses on 'buy, improve, sell' strategies, acquiring assets from private equity firms. Peckham's decision to list in London signals confidence in the UK market and a desire to bring value back to the UK, with aims to generate profit and pay taxes that support public services like the NHS.