Boaz Weinstein’s hedge fund Saba Capital has continued to make waves in the UK investment trust industry, increasing its stake in the $747m Neuberger Private Equity Partners trust to more than 5%, according to an announcement on the London Stock Exchange.
The trust aims to provide a compelling total return by investing in private companies alongside skilled private equity managers, with roughly three-quarters of the portfolio currently concentrated in the US.
Over the past 12 months, the portfolio is up 4.7% compared to the IT Private Equity sector average, which fell by 7.2%. Over three and 10 years, it has also outperformed its peer group, while it barely trailed over five.
Senior analyst at QuotedData, Matthew Read, said: “While Saba Capital’s emergence on NB Private Equity’s share register is unlikely to be welcomed by the board and its fellow shareholders, it will likely concentrate minds.
“NBPE has already been taking increasingly aggressive action to address its discount, committing substantial sums to buybacks, but its shares continue to trade well below NAV.” The trust currently trades at around a 27.8% discount to NAV, according to data from the Association of Investment Companies.
QuotedData said that as a result, there is an “obvious attraction” for a company like Saba to increase its exposure.
“The question is whether Saba will be content to benefit from the board’s efforts to narrow the discount or intends to press for a more radical solution, as it has elsewhere.
“Given that NBPE has been generating meaningful realisations and recycling capital into new opportunities, we think there remains a credible case for allowing the existing strategy to run its course,” Read concluded.
See also: Aviva Investors names two additions to equity team
