Boaz Weinstein, the activist behind Saba Capital Management, began roughly two years ago aiming to shake up segments of the UK's 150-year-old investment trust market. In December 2024, he intensified the campaign with a bid to seize control of seven UK trusts and pressed many of them to swap out directors for his own nominees.
Those early director-change efforts did not pass. Even so, some of the targeted trusts later adopted structural moves that aligned with Saba's agenda. The campaign now includes a push to add new directors at Baillie Gifford US Growth Trust, which lists Anthropic PBC among its largest positions.
According to people familiar with the figures, Saba's CEF Special Opportunities Fund II - a market-neutral strategy aiming for positive returns in any market - advanced roughly 42% after fees over the nine months ended Sept. 30. For context, it posted 4.6% in the prior year and 16.4% in 2024.
The boost came from changes Saba pressed for or supported, including at technology-focused Herald Investment Trust and at a Fundsmith LLP vehicle, that let shareholders cash out at improved prices. A Saba spokesperson declined to comment. One person familiar with the matter said Weinstein is weighing reopening the fund to new money after last taking subscriptions more than two years ago.
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Saba invests in UK trusts through this special opportunities vehicle and other public and private funds. At the end of 2024, its main vehicle dedicated to UK investment trusts had $244 million under management, and it subsequently sent some cash back to investors. This month, Weinstein told the Sunday Times that, across its strategies, Saba's exposure exceeds £2 billion across as many as 50 London-listed companies, a total that factors in leverage.
Weinstein, who started Saba in 2009 after serving as Deutsche Bank AG's co-head of credit trading, oversees $6.8 billion firmwide. The derivatives specialist, also known for the London Whale episode, has spent years and billions buying US closed-end funds managed by BlackRock Inc. and other large firms.
The playbook is simple to describe, tricky to execute. Saba buys into London-listed trusts trading at big discounts to their net assets, then benefits when those gaps shrink, often after buybacks or other changes. An index of UK trust discounts has narrowed during Saba's campaign. The index leaves out 3i Group and venture capital trusts, and sources data from theaic.co.uk and Morningstar.
The bottom line: activism is creating events where discounts close and exits improve. That helped a market neutral fund post standout returns, a reminder that governance catalysts can be as powerful as market moves. Keep an eye on future boardroom changes and buyback programs in the UK trust space. They are where the spread gets paid.
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