Aberdeen Investments and Saba Capital have reached a deal for the former to become the investment manager of Herald Investment Trust (HRI).
The agreement brings a protracted process to a conclusion, and also features a proposed tender offer for up to 66% of HRI’s issued shares.
This gives Saba and other HRI shareholders the option to exit at a price close to NAV. Saba has given an irrevocable undertaking to tender its full holding.
Eight staff, including lead manager Katie Potts, are expected to join Aberdeen, and will relocate to its London office.
There is also a ‘standstill agreement’ with Saba covering Herald and up to a further eight investment trusts in Aberdeen’s range.
The proposal is part of a broader agreement that is intended to bring Herald Investment Management funds under Aberdeen’s management.
Provided the tender offer goes through as planned, the change of investment manager will occur in the third quarter of 2026.
Jason Windsor, chief executive of Aberdeen Group (pictured), 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.
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“Completion of this transaction will further grow our franchise and demonstrates our innovation and commitment to the sector.”
Potts added: “Herald has delivered a clear and successful investment strategy since 1994, and this disciplined approach will remain unchanged with Aberdeen, who I look forward to joining.
“Our focus remains firmly on the technology and communications sectors, which continue to benefit from exceptional innovation and strong long-term growth prospects.
“HIML is pleased to report that the share price and NAV per share of HIML’s investment trust and fund are at record levels.”
Boaz Weinstein, founder and chief investment officer of Saba, said: “Six successful outcomes from our seven original UK campaigns; that record speaks for itself.
“HRI 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.
“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.”
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James Carthew, head of investment companies QuotedData, said: “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.
“I find it inconceivable that a 66% tender offer will be taken up in full, even if Saba exits its entire stake,” he continued. “This is a trust that has delivered a 44% NAV return over the past 12 months and 14.15% per year or 276% in total over the past 10 years.
“It also 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.”
