Saba loses the battle against the Herald board in the first attack of the UK campaign

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US specialist Saba Capital has failed in its bid to topple the board of Herald investment trust, dealing with the first crisis. in its campaign against seven UK listed companies that closed.

A majority of Herald shareholders voted on Wednesday against the US hedge fund’s proposal to replace the trust’s board with its own people, which would have cleared the way for Saba to become director. of investment.

More than 65 percent of the votes cast were against Saba’s plans, according to a press release by the Herald. In addition to Saba’s representative vote, which made up about 35 percent, another 0.15 percent were in favor.

Andrew Joy, chairman of Herald Investment Trust, said the result represented “a clear, complete and irrefutable rebuttal of Saba’s attempt to take control of your company and change its strategy against its wishes and interests.” of non-Saba shareholders”.

Joy said the shareholders invested in Herald because they want to support small technology companies for the long term, saying they “don’t want to be deprived of the opportunity to have a lot of fun” and “they didn’t invest in Herald to be part of their temporary business plan”.

Saba, led by an activist investor Boaz Weinsteinlast month it called meetings of shareholders at seven London-listed investment trusts, claiming that their respective boards did not hold managers accountable for their actions. bad.

The campaign marks one of the biggest shake-ups of the 150-year-old UK investment trust industry, which manages £266bn.

Saba’s defeat against the Herald board comes just a day after the hedge fund agreed to stop its rival fight against 50 BlackRock funds in exchange for a simple offer to two of them.

A large proportion of the Herald’s shareholders are institutional investors such as wealth managers, with individuals accounting for less than a fifth of the register.

But the investment trust industry has warned that individual investors, who account for a larger proportion of shareholders in six other trusts, are less involved in voting than institutions.

Jonathan Simpson-Dent, chairman of Edinburgh Worldwide, another trust targeted by Saba, said “this is just the first battle in a war against seven trusts” and warned that “shareholders will not ignore”.

The UK financial regulator has join the investment platform to ensure that retailers are aware of upcoming options.

Saba’s holdings in each of the trusts range from 19 to 29 per cent and total £1.5bn.

Saba said in a statement that it “remains committed to putting shareholders’ interests first, delivering returns for UK trust investors and ultimately reviving this broken sector.”

It added: “We encourage the shareholders of the other six trusts where we have called for general meetings to support Saba’s decisions in order to put these trusts on the path to creating value with purpose.”