Saba Capital has taken a 5% stake in Pantheon International (PIN ), with founder Boaz Weinstein saying at an event this week that he’s received ‘enormous support’ for entering ‘the private holdings space’. 

Since launching its campaign against seven London-listed public equity trusts back in December 2024, the New York hedge fund has increasingly moved into the alternatives space.

From September alone, it has taken or increased positions in SDCL Energy Efficiency Income (SEIT ), Life Science Reit (LABS ), Gore Street Energy Storage (GSF ), Molten Ventures (GROW ) and RTW Biotech (RTW ). 

Weinstein said the firm has been in discussions with ‘various investors in the UK’ to ‘compare notes’ over the past few months, advising them to ‘nudge management to love their portfolio’ by making sales and using proceeds to fund buybacks.  

In PIN’s case, Weinstein said he had been ‘telling them to nudge the discount tighter’.

The £1.5bn trust, which invests both in private equity funds and directly into unquoted companies, has been languishing on an at least 30% discount for the past five years, despite reporting strong NAV growth, and millions spent on buybacks.   

 The manager encouraged the board to ‘make a sale in the market of a private equity fund that people really want, at a 10% discount, at 15% discount, take that cash and buy back their stuff’. He added that distributions could also be used for the purpose.  

The ‘Frankenstein’s monsters’ of private equity

Weinstein said that discounts have been creating opportunities for activists, particularly in the private holdings space, beyond just the UK. 

As a case in point, he highlighted that interval funds in the US – semi-liquid vehicles with periodic redemption opportunities − have faced ‘large requests for redemptions, 60% in some cases,’ over the past year or so.  

Under that pressure, he said ‘several managers have elected to convert their funds into closed-end structures, effectively turning them into investment trusts’.

He pointed out that FS Speciality Lending fund’s move to go public last week was ‘immediately a 25% loss to investors from the NAV mark’.

‘Some day when we actually have a bear market and investors really want their money back, there’s going to be an enormous imbalance between all of these retail products,’ he added.

The ‘Frankenstein’s monsters they’ve created,’ he said, are ‘not going to have a place to go without there being a very big loss from these lofty NAV levels.’ 

Shareholders over steak dinners 

Looking back on his near one-year crusade and criticising some corners of the UK press for unfair representation, Weinstein highlighted the benefit to shareholders.  

‘Many of [Saba’s campaigns] have been resolved, though you wouldn’t necessarily have heard about it, to the benefit of every shareholder, where the shareholder’s got full exits at NAV, whether it’s through a tender, liquidation or open ending’.  

He praised the Smithson (SSON ) board for its recent decision to convert into an open-ended vehicle, but estimated the total discount across UK trusts today sits around £19.5bn – the figure ‘almost as big’ for Reits alone, at £16.7bn.  

‘I want to commend the Smithson board,’ he said. ‘But there are boards that are really very happy to continue to go to their steak dinners and keep these funds going even while their investors have suffered a massive discount over the last four years’ – discounts that ‘[have] been persistent even with the bigger buybacks that those managers announced.’  

‘My self-interest is laid bare, I’m a hedge fund manager trying to make money for my investors. But the managers’ self-interest isn’t really called out enough’.  

We need to keep asking the question, he said: ‘What is the purpose of an investment trust that only holds public securities when they could just be an open-ended version, like Smithson’s done, and literally every shareholder massively wins?

‘The only bad thing is the manager loses a little AUM, and I think for managers managing trillions, or even hundreds of millions, or even billions, the violins should be incredibly small.’