US IT taking positions in UK ITs. What now?

[needacupoftea]

Trustnet today has a news article today listing about 25 ITs where Saba has a notifiable holding. Some of the reporting dates are rather old, so we don't necessarily know whether that's still the case. Many are well-known smaller company trusts. The seven trusts under attack are those above the 15% threshold for calling a general meeting, and several others are just below it. If some or all Saba's current attempts succeed they will have the resources to increase holdings in these other trusts if that's their plan. I don't think it will end with just these seven.
Reading the circulars and commentries elsewhere, the plan would appear to be to appoint Saba as the manager of the trusts; apparently Saba charge management fees of around 6% of the US trusts they manage. That's possibly the main way they see of making a profit; any closing of the discount would be incidental.

(I hold ESCT and a couple of others of the Trustnet list).

[XFool]

Subject: Herald Investment Trust PLC Requisitioned General Meeting Voting Instruction Form
From: $Stockbroking-Voting&Perks <stockbrokingvotingperks@lloydsbanking.com>
To: ************
Date: Wed 13:15

Ref: ********

Dear ********

As you hold shares in Herald Investment Trust plc you can place a vote and/or attend their Requisitioned General Meeting.
Let us know if you want to attend in person
The meeting is being held at 10-11 Charterhouse Square, London EC1M 6EE. on 22nd January 2025 at 12.00 pm
If you wish to attend the meeting, reply to this e-mail and place a 'X' in this box.

[I WISH TO ATTEND][ ]

If when replying you have any trouble adding an ‘X’ to the tables below, please can you reply to the email with your instructions.
For example, “I would like to attend the meeting” and/or “I would like to vote for/against all resolutions.
We’ll arrange your attendance on the 16th January 2025 - we will send you a Corporate Letter of Representation, you must take this with you to the meeting.

Alternatively, tell us how you would like to vote

We can place the vote on your behalf - this is known as a proxy vote.

· Click reply to the e-mail before marking the resolutions
· Mark your resolutions with an X.
· Only select one box per resolution.
· Any you leave blank will be submitted as Abstain.
· Selection of more than one option will also be counted as Abstain.

To be valid this table must reach Halifax Share Dealing no later than 16th January 2025.
Please note that this date may differ from the company’s as we must collate and submit all of our customers’ voting instructions - any requests received to vote or attend after our deadline date cannot be accommodated.

For more information on the resolutions please visit https://defence.heralduk.com/home/.

If we’re voting for you, make your selection below and reply to this email.

[STANDARD VOTING FORM]

Yours sincerely

Manuel Pardavila-Gonzalez
Managing Director

Halifax Share Dealing Limited

[UncleEbenezer]

I've just sent H-L a message:

I voted earlier this week on the EGM for Herald Investment Trust in my SIPP/Drawdown. An activist shareholder is attempting to take over management of this and other UK investment trusts.

I'm slightly concerned that I don't appear to have received notification of this important vote. Whereas I learned of it elsewhere, it may be that other shareholders are not necessarily aware of the event, or of the H-L deadline for voting.

Given that you frequently notify me of events that don't require my attention (most recently yesterday re: the mergers of Albion VCTs, the vote for which was some time ago), I wonder what your policy is on these matters?

Come to think of it, I need to sell some investments to take my annual drawdown payment in March. Maybe HRI should go?

[XFool]

BTW. In posting the above email I just noticed this in the message: "Click reply to the e-mail before marking the resolutions"

Could this be why I have not been able to get their emailed voting form to work previously? I imagine I tried filling in the form before clicking reply.

[DavidM13]

Subject: Herald Investment Trust PLC Requisitioned General Meeting Voting Instruction Form
From: $Stockbroking-Voting&Perks <stockbrokingvotingperks@lloydsbanking.com>
To: ************
Date: Wed 13:15

Ref: ********

Dear ********

As you hold shares in Herald Investment Trust plc you can place a vote and/or attend their Requisitioned General Meeting.
Let us know if you want to attend in person
The meeting is being held at 10-11 Charterhouse Square, London EC1M 6EE. on 22nd January 2025 at 12.00 pm
If you wish to attend the meeting, reply to this e-mail and place a 'X' in this box.

[I WISH TO ATTEND][ ]

If when replying you have any trouble adding an ‘X’ to the tables below, please can you reply to the email with your instructions.
For example, “I would like to attend the meeting” and/or “I would like to vote for/against all resolutions.
We’ll arrange your attendance on the 16th January 2025 - we will send you a Corporate Letter of Representation, you must take this with you to the meeting.

Alternatively, tell us how you would like to vote

We can place the vote on your behalf - this is known as a proxy vote.

· Click reply to the e-mail before marking the resolutions
· Mark your resolutions with an X.
· Only select one box per resolution.
· Any you leave blank will be submitted as Abstain.
· Selection of more than one option will also be counted as Abstain.

To be valid this table must reach Halifax Share Dealing no later than 16th January 2025.
Please note that this date may differ from the company’s as we must collate and submit all of our customers’ voting instructions - any requests received to vote or attend after our deadline date cannot be accommodated.

For more information on the resolutions please visit https://defence.heralduk.com/home/.

If we’re voting for you, make your selection below and reply to this email.

[STANDARD VOTING FORM]

Yours sincerely

Manuel Pardavila-Gonzalez
Managing Director

Halifax Share Dealing Limited

Thanks!

[XFool]

BTW. This morning I received a direct mailing (despite not being a direct shareholder) from the Herald Investment Trust Chair, Andrew Joy setting out the whole matter and urging shareholders to vote. With an example text template for nominee brokers included. So they are pulling out all the stops.

"YOUR VOTE IS VERY IMPORTANT. YOUR BOARD BELIEVES THAT SABA IS ATTEMPTING TO TAKE CONTROL OF YOUR COMPANY FOR ITS OWN ECONOMIC BENFIT AND TO CHANGE THE COMPANY'S INVESTMENT STRATEGY, POTENTIALLY DESTROYING VALUE."

...I have just realised. I have another holding of HRI in a separate ISA. I will need to contact them to see if I can vote those shares too.

[UncleEbenezer]

BTW. This morning I received a direct mailing (despite not being a direct shareholder) from the Herald Investment Trust Chair, Andrew Joy setting out the whole matter and urging shareholders to vote. So they are pulling out all the stops.

"YOUR VOTE IS VERY IMPORTANT. YOUR BOARD BELIEVES THAT SABA IS ATTEMPTING TO TAKE CONTROL OF YOUR COMPANY FOR ITS OWN ECONOMIC BENFIT AND TO CHANGE THE COMPANY'S INVESTMENT STRATEGY, POTENTIALLY DESTROYING VALUE."

...I have just realised. I have another holding of HRI in a separate ISA. I will need to contact them to see if I can vote those shares too.

I received similar in the post this afternoon. It was customised to the extent of mentioning that I hold the shares through H-L.

I think I may also need to correct my earlier post:

I also note performance: it's up 200% in five and a half years. That's not my full holding time (can't find any record of that), but the time since transfer from SIPP to Drawdown, when I took the tax-free 25% to buy a house.

I think that 200% is indeed over my entire holding time. The date shown is a red herring: it's when the SIPP transferred to drawdown, but the price shown was preserved from when I actually bought. It's not a big holding, and I only bought once!

[UncleEbenezer]

OK, finally email from H-L. Not explicit notification, but a pointer to their article on all seven ITs.
https://www.hl.co.uk/shares/investment- ... ent-trusts

[UncleEbenezer]

Trustnet today has a news article today listing about 25 ITs where Saba has a notifiable holding.

Thanks for pointing to that! I guess as a new poster it wouldn't let you post https://www.trustnet.com/news/13434502/ ... arget-next

I see one of my bigger holdings on that list

[Dumbo]

Trustnet today has a news article today listing about 25 ITs where Saba has a notifiable holding.

Thanks for pointing to that! I guess as a new poster it wouldn't let you post https://www.trustnet.com/news/13434502/ ... arget-next

I see one of my bigger holdings on that list

Yep me too. Lowland lived up to their name last year with a discount wider than the average and a share price well under par as well.

Quite honestly if the best these boards can come up with is to buy back their own shares trading at a discount, I don't think it will be a disaster if Saba kicks things up a bit. It may actually be a thing that makes some of these boards get their finger out and do something positive to improve matters.

Good luck to all holders of these IT's, we need it.

Eddie

[Lootman]

Quite honestly if the best these boards can come up with is to buy back their own shares trading at a discount, I don't think it will be a disaster if Saba kicks things up a bit. It may actually be a thing that makes some of these boards get their finger out and do something positive to improve matters.

Good luck to all holders of these IT's, we need it.

I agree the sector needs a shakeup, and an aggressive outside catalyst like Saba is helpful in that regard.

Unfortunately I can recall efforts like this going on 20 and 30 years, ago, before the advent of exchange-traded funds, that are now a much larger sector, and global rather than UK only. And to be fair a good number of under-performing ITs have been would up, merged or taken over, or converted to another type of fund. This include what was for many years the largest of all ITs: Globe.

Another problem with ITs is that it is hard to successfully launch a new one, other than with some gimmick, because of the risk of it immediately going to a discount giving investors an instant loss. So the sector naturally becomes smaller, at least in relative terms.

I've invested in ITs for over 35 years now. But with each passing year they become less important to my goals, and new money goes elsewhere.