New Yorker Saba Capital, best known for picking fights with BlackRock and Citadel over under-performing funds, has been quietly expanding its Australian portfolio, its disclosures show.
Saba is sitting on stakes in Chris Mackay’s $2 billion MFF Capital Investments; the circa $392 million Platinum Capital; Geoff Wilson’s $769 million WAM Global; and two LICs from overseas fund managers that trade on the ASX – WCM Growth and NB Global Corporate Income Trust.
The activist fundie remained below the 5 per cent mark at each of the five LICs, meaning its arrival has gone unnoticed on Australian shores. That’s despite it being spelled out in the disclosures of its two NYSE-listed Saba Capital Income & Opportunities Fund vehicles as of January 31. It made a splash when it popped up above the substantial shareholder mark last year at VGI Partners Global Investments, Pengana International Equities and the Hearts and Minds Investments LIC.
No prizes for guessing what is the common thread among the new entries. As of January end, MFF was trading at a 15.4 per cent discount to the underlying portfolio value, while Platinum Capital was at 15.1 per cent and WAM Global was at 13.2 per cent. The WCM and Neuberger funds were at 11.3 per cent and 8.4 per cent respectively. Funnily enough, the fox in the henhouse is not immune to trading discounts either.
We’ll hazard a guess Platinum would be the one most nervous about the New Yorker’s arrival at its LIC, which returned just 5.1 per cent to MSCI World’s 21.4 per cent last year. As for Saba’s already public targets, it appears to be concentrating its efforts at Hearts & Minds Investments, where it has built a 9.4 per cent stake as of January 10.