Herald Investment Trust (LON: HRI) says the requisition notice from Saba Capital Management is valid. The US hedge fund believes that the investment trust has underperformed and wants to replace the board and appoint two new directors.
Saba Capital Management has acquired a 19% stake in Herald Investment Trust. It previously owned 4.9%. A general meeting date will be set.
This is one of seven investment trusts targeted by Saba Capital Management. The others are Baillie Gifford US Growth Trust (LON: USA), CQS Natural Resources Growth & Income (LON: CYN), Edinburgh Worldwide IT (LON: EDIN), European Smaller Companies Trust (LON: ESCT), Henderson Opportunities Trust (LON: HOT) and Keystone Positive Change IT (LON: KPC).
The argument is that all these investment trusts have underperformed and have discounts to NAV that the US hedge fund believes is too high. The boards are not perceived to have done enough to improve this. Saba Capital Management believes that it has the expertise to
Herald Investment Trust, which invests in smaller, international technology companies, had net assets of £24.7849 on 18 December. The investment trust has outperformed the Deutsche Numis Small Companies Index, including AIM, and the Russell 2000 Tech Index over its 30-year history. NAV has risen by nearly 2,500% since incorporation. No dividend has been paid since 2012.
The Herald Investment Trust share price has fallen 40p to £24.40. The discount to NAV is just over 1%.