Thursday 07 May 2026 3:21 pm
Herald Investment Trust has been saved after a last-minute agreement between US activist hedge fund Saba Capital and Aberdeen, the Scottish investment giant. The deal ends a prolonged struggle over the trust's future, with Aberdeen set to manage the £1.5bn fund and retain key staff, including fund manager Katie Potts.
In an eleventh-hour deal that will prevent Herald from being wound down, Aberdeen will recruit eight of the fund’s staff and take over the trust’s management, according to a joint statement on Thursday. The rapprochement was overseen by Herald’s largest shareholder, Saba, whose billionaire founder Boaz Weinstein has been engaged in a hard-fought battle to overhaul Herald’s governance and structure as part of a wider activist campaign on UK investment trusts.
The London-listed trust was on the brink of being wound down, with returns being handed back to shareholders, after Saba built up a 30 per cent stake in 2023. Saba’s holding sparked an almighty tug of war over the direction and fate of Herald, leading to several shareholder showdowns where investors voted down Saba’s core proposals.
As part of the deal, shareholders will be given the opportunity to exit their investment before the management is transferred to Aberdeen. The trust has agreed to offer two-thirds of its shares at net asset value (NAV) as part of a tender process.
“This agreement draws nearly 18 months of significant uncertainty for Herald to a close, and we think it represents a good outcome for all shareholders,” said Emma Bird, investment trust analyst at Winterflood. “The commitment by Saba to exit their holding in full removes a key uncertainty overhang and enables the fund to move forward with its long-term investment strategy with a more supportive shareholder base.”
The tender offer will take place before the third quarter of 2026, after which the remaining trust assets will move under Aberdeen Investments, the fund management arm of the FTSE 250 investment giant. Weinstein hailed the agreement as a victory for Saba, branding it a blueprint for effective engagement.
“Herald shareholders will now have real choice: immediate liquidity close to NAV, or continued exposure to the same strategy they believe in under a stronger institutional platform,” he said. “This is what shareholder engagement looks like when boards act in the interests of the people they serve, and it is what Saba will keep demanding across the UK investment trust sector.”
Under the terms, Saba is poised to exit its stake as part of the tender offer and has vowed not to undertake any more aggressive moves for four years. The deal draws a line under a tumultuous period for the trust, which had been rocked by Weinstein’s dogged campaign despite its NAV rising by 44 per cent in the past 12 months.
Herald’s investment strategy and mandate will remain the same under Aberdeen, founder Katie Potts said. Shares in Herald popped by more than two per cent on Thursday morning, pushing its market capitalisation up more than 25 per cent so far this year.
James Carthew, head of investment company research at Quotedata, played down the risk of the two-thirds tender offer being taken up in full, calling the prospect “inconceivable”. “I’m delighted that a way has been found for Herald to continue. It is a coup for Aberdeen to secure the trust and the services of Katie and her team,” he said. “It is a unique way of accessing an exciting part of the market. If anything, investors should be thinking about buying stock now that the trust’s future is secure, I know I am.”
