19th December 2024
We end the year with the Saba Capital bombshell: read Boaz Weinstein’s letter to the shareholders of 7 investment trusts here.
As we have stated many times, actors like Saba Capital and other activists, arbitrageurs, short-term discount players and speculators are necessary parts of a healthy functioning capitalist free market system. Some people may not like wasps but without them, our ecosystem would collapse.
We urge Boards to introduce measures to ensure they do not become the target of activists. Persistent wide discounts should be addressed via every means possible. We think discounts matter. Shareholders become disillusioned that they haven’t participated in the NAV returns and give up, while new investors won’t get involved without confidence the discount will at least keep track with the NAV let alone narrow. The health of any complex system sometimes means shrinking to grow again and we believe the investment trust sector has just started on a (hopefully short-lived) period of creative destruction.
We set out our views on the sector last summer in our 7-part “We Need to Talk About Investment Trusts” series (see compendium here). Our arguments still stand. We care deeply about the sector and believe it contributes greatly to society. It is time for wide-ranging reforms. Saba Capital is not the problem – they are just taking advantage of an opportunity set Boards and investment managers must do their best to shrink.
We hope you have enjoyed our ‘weekly’ Crescendo blog this year. We will return in the new year with a review of 2024 and our thoughts for 2025. Until then, we wish you and yours a joy-filled festive season, and a healthy Happy New Year.
We end the year with the Saba Capital bombshell: read Boaz Weinstein’s letter to the shareholders of 7 investment trusts here.
As we have stated many times, actors like Saba Capital and other activists, arbitrageurs, short-term discount players and speculators are necessary parts of a healthy functioning capitalist free market system. Some people may not like wasps but without them, our ecosystem would collapse.
We urge Boards to introduce measures to ensure they do not become the target of activists. Persistent wide discounts should be addressed via every means possible. We think discounts matter. Shareholders become disillusioned that they haven’t participated in the NAV returns and give up, while new investors won’t get involved without confidence the discount will at least keep track with the NAV let alone narrow. The health of any complex system sometimes means shrinking to grow again and we believe the investment trust sector has just started on a (hopefully short-lived) period of creative destruction.
We set out our views on the sector last summer in our 7-part “We Need to Talk About Investment Trusts” series (see compendium here). Our arguments still stand. We care deeply about the sector and believe it contributes greatly to society. It is time for wide-ranging reforms. Saba Capital is not the problem – they are just taking advantage of an opportunity set Boards and investment managers must do their best to shrink.
We hope you have enjoyed our ‘weekly’ Crescendo blog this year. We will return in the new year with a review of 2024 and our thoughts for 2025. Until then, we wish you and yours a joy-filled festive season, and a healthy Happy New Year.
Ben Conway – Head of Fund Management
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