Aberdeen Investments has agreed to take over management of Herald Investment Trust (HRI) from Q3 2026, in a deal that also draws a line under Saba Capital’s activist campaign.
Under the proposal, lead manager Katie Potts and seven colleagues will move to Aberdeen, bringing with them Herald Investment Management’s funds, including the Herald Worldwide Technology Fund. The combined assets under management come to around £1.6bn.
The agreement is a major vote of confidence in Aberdeen’s investment trust portfolio and management approach. The HRI team will integrate with Aberdeen’s London office and will benefit from the strength of Aberdeen’s distribution and marketing reach.
For HRI shareholders, the immediate option is a tender offer for up to 66% of the share capital at close to NAV. Saba, the trust’s largest holder, has given an irrevocable undertaking to tender its entire stake, effectively securing the exit it has been pressing for.
Other shareholders can either follow Saba out at close to NAV or stay invested under Aberdeen’s stewardship.
Notably, Saba has signed a three-year agreement covering HRI under which it cannot vote against the board’s recommendations at general meetings. More importantly for the Aberdeen stable, the standstill framework extends to up to eight additional Aberdeen trusts, with a combined AUM of around £12.5bn, should their independent boards opt in.
What it means for investors
HRI shareholders get a clean choice: take cash near NAV or back Aberdeen and Potts in the next chapter. Continuity of the manager who built the trust’s record in technology and smaller companies is a notable plus.
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “This is a successful outcome for shareholders. It’s excellent to see proposals that will allow Herald Investment Trust to continue to deliver strong returns for its shareholders. We’d like to congratulate the board of Herald and Aberdeen Investments on this creative solution.
“Herald is a unique investment trust, backing high-growth tech and communications businesses, led by Katie Potts, one of the longest serving managers in the industry. Long may it continue!”
For holders across the broader Aberdeen trust range, the agreement neutralises Saba as an activist threat for three years, removing the pressure that has weighed on discounts and forced boards into defensive manoeuvres elsewhere.
It is also a notable win for Aberdeen, which picks up a respected technology and small-cap franchise and removes a destabilising shareholder from up to nine trusts in one stroke. Completion is subject to the tender process, regulatory approvals and transitional arrangements, with the manager change expected to take effect in Q3 2026.
Jason Windsor, CEO, Aberdeen Group, said: “The Herald team has a long track record of backing early-stage technology companies, and driving material long term growth from those investments. As the fifth largest manager of closed-end funds globally, and as a leading small cap manager, we are delighted to welcome Katie Potts and her team to Aberdeen. Completion of this transaction will further grow our franchise and demonstrates our innovation and commitment to the sector.”