WEBVTT - Merryn and John Discuss the Showdown Between Saba and Investment Trusts 0:00:02.720 --> 0:00:20.160 Bloomberg Audio Studios, Podcasts, radio News. Welcome to the Meren 0:00:20.160 --> 0:00:24.000 Talks Money Weekly rounder, our debrief on the biggest stories 0:00:24.079 --> 0:00:27.120 in markets and economics and' Merenthum's that web editor in 0:00:27.240 --> 0:00:29.320 Larnch for Bloomberg UK Wealth and. 0:00:29.280 --> 0:00:32.280 I'm joined the Seniors Report and author of the Money 0:00:32.280 --> 0:00:33.159 Distilled newsletter. 0:00:33.840 --> 0:00:37.040 Right now, when we say the stories this week, we 0:00:37.080 --> 0:00:40.920 don't really mean the stories. We mean the story because 0:00:40.960 --> 0:00:43.519 there is only one. Well in our little niche and 0:00:43.560 --> 0:00:46.519 our little niche, there is only one and that is 0:00:46.560 --> 0:00:50.240 what's going on in the UK investment trust industry now. 0:00:50.240 --> 0:00:53.840 Earlier this week, John spoke to Boas Weinstein, chief investment 0:00:53.880 --> 0:00:57.840 officer and founder of Saba Capital Management. If you haven't 0:00:57.880 --> 0:01:01.880 listened to that episode, go and listen to it because 0:01:01.920 --> 0:01:03.840 it sets us up for what we're going to talk 0:01:03.840 --> 0:01:07.600 about today. In a nutshell, Weinstein and his firm Suba 0:01:07.600 --> 0:01:11.240 Capital are attempting to take control of seven UK investment 0:01:11.280 --> 0:01:15.399 trusts because they're trading on high discounts. Have been trading 0:01:15.440 --> 0:01:18.200 on high discounts, then has the value? Maybe their returns 0:01:18.240 --> 0:01:20.480 have been a little rubbish, maybe the governance is all 0:01:20.520 --> 0:01:23.120 it should have been, etc. So they want to take 0:01:23.120 --> 0:01:25.640 control of these of these trusts. We're going to talk 0:01:25.680 --> 0:01:28.200 about what that means and why maybe they should maybe 0:01:28.200 --> 0:01:28.759 they shouldn't. 0:01:28.760 --> 0:01:29.319 Too knows. 0:01:29.560 --> 0:01:34.160 Anyway, since we published that podcast with Weinstein, some of 0:01:34.160 --> 0:01:37.720 the trusts that is looking at have contacted us and said, look, 0:01:37.760 --> 0:01:39.680 do you know what this isn't all right? He said 0:01:39.720 --> 0:01:42.960 some stuff that maybe misinformation, maybe not information. We don't 0:01:43.000 --> 0:01:44.720 agree with what he says about this. We don't agree 0:01:44.720 --> 0:01:46.160 with what he said about that. So we want to 0:01:46.200 --> 0:01:49.240 have our say. Now, we can't have all seven chair 0:01:49.280 --> 0:01:51.280 people of those trusts on where we could be kind 0:01:51.320 --> 0:01:55.520 of chaotic and slightly carnage like. So John and I 0:01:55.600 --> 0:01:59.560 are going to run through all the concerns that everybody 0:01:59.600 --> 0:02:02.840 has and try and come to some kind of conclusion 0:02:02.880 --> 0:02:04.840 towards the end. Now, one thing I want to add 0:02:04.880 --> 0:02:07.720 before I do that is that regular listeners will know 0:02:07.960 --> 0:02:09.880 that I am on the board of a couple of 0:02:10.000 --> 0:02:13.480 UK listed investment trusts. Neither of these trusts are on 0:02:13.520 --> 0:02:16.560 saba's lists, so it's not relevant, but there is, you know, 0:02:16.639 --> 0:02:18.360 that's out there. I've got some skin in the investment 0:02:18.360 --> 0:02:20.679 trust game. I don't think I'm conflicted anywhere, but you know, 0:02:20.760 --> 0:02:24.160 I'll leave that up to you now, you know, right, John? 0:02:24.600 --> 0:02:25.480 Do you know what I think? 0:02:25.919 --> 0:02:28.400 Boy? Do you think? Man? I think I've had. 0:02:28.320 --> 0:02:29.400 Too many emails on this. 0:02:30.880 --> 0:02:34.600 Sorry, Like I love that they sent them all to you. 0:02:34.960 --> 0:02:37.280 This is a great thing of it, like being able 0:02:37.320 --> 0:02:41.399 to kind of just come on, do an interview, chataway. 0:02:41.520 --> 0:02:43.640 Is someone rail everyone up and then you get all 0:02:43.680 --> 0:02:46.359 the complaints. It's fantastic. It's like Bitcoin all over again. 0:02:46.960 --> 0:02:49.079 It is Bitcoin all over again. And you know, a 0:02:49.080 --> 0:02:51.160 couple of people would like me to do something about you, 0:02:51.360 --> 0:02:53.440 like the Bitcoin people would like you to do something 0:02:53.480 --> 0:02:55.280 about me. So I'm not going to do anything about 0:02:55.320 --> 0:02:57.040 you as long as you don't do anything about me. 0:02:57.639 --> 0:02:59.200 I think that sounds like a good deal. 0:03:00.040 --> 0:03:03.280 Okay. The other thing I think is that I've got 0:03:03.320 --> 0:03:06.520 so many windows open on my desktop looking at this. 0:03:06.639 --> 0:03:09.000 There are so many different views, And do you know 0:03:09.040 --> 0:03:15.720 what I really think? In the end, No, everybody's right. Absolutely, 0:03:15.919 --> 0:03:19.840 everybody is right. Everybody who has written to me, everybody 0:03:19.880 --> 0:03:23.400 who's telephoned me, contacted me on LinkedIn, abuse me on Twitter. 0:03:24.000 --> 0:03:28.200 Everybody has a point about this. It all comes down 0:03:28.280 --> 0:03:32.040 to do you think it's reasonable for an investment trust 0:03:32.080 --> 0:03:34.880 to trade it a discount. Do you think long term 0:03:34.960 --> 0:03:36.920 is three years or do you think long term is 0:03:36.960 --> 0:03:39.840 five years? What do you think a reasonable fear fears? 0:03:39.880 --> 0:03:41.600 What does governance really mean to you? 0:03:41.960 --> 0:03:42.160 Etc? 0:03:42.440 --> 0:03:45.040 Etc. Do you think that the investment trust industry is 0:03:45.080 --> 0:03:49.360 such an important part of the UK investment and finance 0:03:49.440 --> 0:03:53.320 ecosystem and in particular maybe even the startup ecosystem, that 0:03:53.400 --> 0:03:56.080 it should be somehow protected in a way that other 0:03:56.120 --> 0:03:59.400 companies aren't, etc. And there are great arguments on both 0:03:59.440 --> 0:04:01.720 sides for them. Now, on the same day that we 0:04:01.800 --> 0:04:04.600 released your fascinating chat by the way, with their birds, 0:04:04.640 --> 0:04:06.280 one them, would you actually like to have my job? 0:04:06.320 --> 0:04:10.320 You do this really well? I know I couldn't possibly. 0:04:10.360 --> 0:04:11.920 I mean, for start, I mean start getting some of 0:04:11.920 --> 0:04:12.920 the complaints dayrectly. 0:04:13.480 --> 0:04:17.120 Ah, that'll always come to me anyway. The same day 0:04:17.120 --> 0:04:20.559 that we put that out, Burzwinstein also had his own 0:04:20.600 --> 0:04:24.520 webinar where he talked for over an hour about why 0:04:24.560 --> 0:04:27.719 he's doing and what he's doing, and quite rude about 0:04:27.760 --> 0:04:29.800 a lot of people, quite rude about a lot of directors, 0:04:30.240 --> 0:04:32.400 very rude about quite a few fun managers. And he 0:04:32.480 --> 0:04:35.480 talks a lot about about things that you know, not 0:04:35.480 --> 0:04:37.640 not everything he said, with the stuff that I would 0:04:37.640 --> 0:04:40.000 have agreed to. You talk about the principal agent problem, 0:04:40.040 --> 0:04:42.440 about how the manager is the agent and in all 0:04:42.480 --> 0:04:44.640 these trusts the manager has a mistake and no skin 0:04:44.680 --> 0:04:46.760 of the game, and the manager is there to protect 0:04:46.800 --> 0:04:49.880 the assets, et cetera. All true, but that's what the 0:04:49.920 --> 0:04:53.080 board is there for. The board represents the principal and will. 0:04:53.120 --> 0:04:56.080 Boards don't in the main own very many shares relative 0:04:56.120 --> 0:04:58.719 to institutions, because boards are individuals, right. So if you 0:04:58.720 --> 0:05:01.560 own ten pounds, twenty pounds, thirty thousand pounds, and in 0:05:01.560 --> 0:05:04.839 some cases much more of a trust, you've got put 0:05:04.880 --> 0:05:07.240 a reasonable bit of your personal money in it. But 0:05:07.240 --> 0:05:09.520 obviously it's nothing compared to what the institutions might have. 0:05:09.560 --> 0:05:11.560 So it's skin in the game, but not in an 0:05:11.560 --> 0:05:14.279 institutional kind of way. So there was some confusion that 0:05:14.400 --> 0:05:16.320 irritated me a little. Got to say boas this did 0:05:16.360 --> 0:05:19.720 irritate me, confusion between the manager and the board. And 0:05:19.800 --> 0:05:22.200 I think in my experience of this sector anyway, that 0:05:22.360 --> 0:05:26.360 boards are very good at remaining independent from the fund managers. 0:05:26.400 --> 0:05:29.000 So that irritated me a little. But I did you know, 0:05:29.080 --> 0:05:32.599 I got that general idea that in the main what 0:05:33.000 --> 0:05:35.760 a fund manager wants to do is hang onto assets. 0:05:35.839 --> 0:05:38.000 That's what they want. You know, most big fund managers 0:05:38.040 --> 0:05:41.320 are asset gatherers. They want to get money, keep money, 0:05:41.520 --> 0:05:43.400 take the fee on that money. And in that sense, 0:05:43.520 --> 0:05:46.440 investment trust are very good for fund managers because that 0:05:46.480 --> 0:05:49.520 money is trapped, unlike an open ended fund where that 0:05:49.560 --> 0:05:52.160 money is not trapped. Investment trust are great because they 0:05:52.240 --> 0:05:54.600 just sit there little pool of permanent capital. Take your 0:05:54.640 --> 0:05:56.760 fee every year. So you know, that's one thing he 0:05:56.800 --> 0:05:59.240 said that really made sense. It also makes sense to 0:05:59.240 --> 0:06:01.160 say that the trust to your targeting, you do have 0:06:01.440 --> 0:06:04.719 horrible performance over three years, horrible And if your time 0:06:04.760 --> 0:06:06.760 frame is for three years, and you would certainly look 0:06:06.760 --> 0:06:08.479 at some of the baby gifted stuff and you get 0:06:08.839 --> 0:06:10.960 why on earth am I holding this? Why can't they 0:06:10.960 --> 0:06:13.159 make it better? Why have they lost forty fifty percent 0:06:13.200 --> 0:06:15.200 of my money over three year? This is horrible Because 0:06:15.240 --> 0:06:17.440 if you look at it longer term, not so horrible. 0:06:17.600 --> 0:06:19.880 And if you approve the strategy, then you know you're 0:06:19.920 --> 0:06:21.520 going to give it another four or five years before 0:06:21.520 --> 0:06:22.520 you start to lose your temper. 0:06:23.720 --> 0:06:27.800 Yeah, I mean, I do think and certainly from a 0:06:27.960 --> 0:06:30.440 conversation in the interview. But I did make the point 0:06:30.560 --> 0:06:34.360 that the last three years, particularly that's when interest rates 0:06:34.360 --> 0:06:38.080 started rising, there are good micro reasons why performance would 0:06:38.120 --> 0:06:40.520 be specifically bad over this time period. And I also 0:06:40.680 --> 0:06:43.560 think if you are quite careful about the starting date 0:06:43.600 --> 0:06:45.280 that you choose, you know, you can choose a date 0:06:45.360 --> 0:06:47.320 before the big sale of Hartens, so you can make 0:06:47.360 --> 0:06:50.320 it look even worse than it is. I mean, that's 0:06:50.360 --> 0:06:53.000 one thing you notice whenever you're messing around with chats 0:06:53.000 --> 0:06:54.680 on the Bloomberg term, know that if you change the 0:06:54.720 --> 0:06:58.240 starting date, it can make a substantial difference, even though 0:06:58.240 --> 0:07:02.440 you're broadly making the same sort of point. So I 0:07:02.440 --> 0:07:03.800 did sort of say, I said, you know, so what 0:07:03.800 --> 0:07:05.640 but this three year thing? And he said, go, you said, 0:07:05.640 --> 0:07:09.160 you're a very you're a very forgiven investor. So I 0:07:09.320 --> 0:07:12.120 started thinking, you know, in the hedge find world, three years, 0:07:14.080 --> 0:07:16.400 where as in the investment transport three years is a 0:07:16.440 --> 0:07:18.760 relatively short time for him. 0:07:19.040 --> 0:07:21.560 Yes, yes, And I do think, by the way, everybody 0:07:21.560 --> 0:07:24.400 that's going in and watching and obviously listen to John's 0:07:24.400 --> 0:07:28.200 podcast first, but then do go and watch both Mindstone speaking, 0:07:28.240 --> 0:07:31.000 because uh, you know, there's a lot to argue with, 0:07:31.160 --> 0:07:33.120 but there's a bit what he says. And you know, 0:07:33.160 --> 0:07:36.160 I'm sorry about this. I don't want to repeat things 0:07:36.160 --> 0:07:38.400 that make people feel a little sad. But he says 0:07:38.400 --> 0:07:43.160 to Bailly Gifford, aren't you embarrassed? Aren't you embarrassed? And 0:07:43.480 --> 0:07:46.640 you know this is very feisty stuff. Bailly Gifford is 0:07:47.000 --> 0:07:50.120 one of the one of the big and most respective 0:07:50.120 --> 0:07:52.920 fund managers in the UK, and he pulled out their 0:07:52.920 --> 0:07:55.000 three years performance and nically it looks over three years 0:07:55.000 --> 0:07:57.160 in a couple of places, and he says, look, aren't 0:07:57.160 --> 0:08:00.160 you embarrassed by this? Look what you've done. Look how 0:08:00.200 --> 0:08:03.960 much money you have lost your investors. And you know 0:08:04.040 --> 0:08:06.840 that is it's potent stuff. It's true because this is 0:08:06.880 --> 0:08:10.800 real money. If you invested at the top, that's real 0:08:10.840 --> 0:08:12.920 money that you work for. That you said, and it's gone, 0:08:13.080 --> 0:08:15.760 it's gone, And this should be a response to that. 0:08:16.840 --> 0:08:20.800 I agree, and I think that either well, you can, 0:08:21.360 --> 0:08:24.000 you can have discussions and make excuses and all the rest. 0:08:24.160 --> 0:08:27.560 And again it's always possible to do that. At the 0:08:27.640 --> 0:08:31.200 end of the day, the job the fund managers fundamentally 0:08:31.280 --> 0:08:34.719 is to look after their customers money and make more 0:08:34.760 --> 0:08:37.800 of it in the fundamental favor of all of these 0:08:37.800 --> 0:08:41.360 trustes that none of them are necessarily you know, they're 0:08:41.360 --> 0:08:44.800 not benchmark huggers. But the problem is, if I mean 0:08:45.000 --> 0:08:46.960 doing there is a fair point where if you've been 0:08:47.000 --> 0:08:50.080 sort of viewed as a techie growthy fund in the 0:08:50.160 --> 0:08:54.160 last you know, three years and you still struggled to 0:08:54.440 --> 0:08:56.760 you know, come up to the S and P, especially 0:08:56.800 --> 0:08:58.800 if most of your investments are in the US, then 0:08:59.400 --> 0:09:03.680 that is train out how to explain that. We leasily 0:09:03.720 --> 0:09:05.280 if you'd been putting all your money in an S 0:09:05.320 --> 0:09:07.880 and P five hundred passive tracker with the rest of 0:09:07.920 --> 0:09:10.880 the population over this time period, and you do probably 0:09:10.920 --> 0:09:12.800 have a rate to feel a little bit faired up. 0:09:13.480 --> 0:09:16.280 So there is this key thing here. There is a 0:09:16.400 --> 0:09:18.760 problem in the sector. A lot of the discounts in 0:09:18.760 --> 0:09:21.959 the investment to respector they have become structural. They're there 0:09:22.120 --> 0:09:25.199 and they haven't gone away in three years is too long. 0:09:25.880 --> 0:09:27.760 And we did have and I'm sure that everyone in 0:09:27.800 --> 0:09:31.800 the industry will have read it. There was Alan Briley 0:09:31.840 --> 0:09:33.720 of Investor put out a note last year where he 0:09:33.760 --> 0:09:37.000 pointed out that this stuff is beginning to be a problem. 0:09:37.040 --> 0:09:38.920 He said it wasn't last yearously it was a year 0:09:38.960 --> 0:09:41.800 before October twenty twenty three, and I remember it coming 0:09:41.800 --> 0:09:45.120 out and him saying, look, we've got an end of 0:09:45.200 --> 0:09:48.480 cycle challenge here. There are various exceptional events going on, 0:09:48.600 --> 0:09:51.720 but this is a perfect storm and it comes with 0:09:51.920 --> 0:09:54.960 some self inflected wounds and you lot have got to 0:09:55.000 --> 0:09:58.199 do something about it. You haven't responded fast enough to 0:09:58.280 --> 0:10:00.960 all sorts of things. There's discounts of multi years highs. 0:10:01.080 --> 0:10:04.080 There's blood in the water. This is going to attract 0:10:04.320 --> 0:10:07.200 arbitra's and it's going to attract corporate buyers unless you 0:10:07.320 --> 0:10:09.600 do something about it. You have got to do something 0:10:09.640 --> 0:10:13.440 about your discounts to get out there, create tenders, buy 0:10:13.480 --> 0:10:17.280 back properly, make sure these discounts come down to levels 0:10:17.320 --> 0:10:19.280 where you are not going to be attacked. And of 0:10:19.280 --> 0:10:22.080 course the sector did not react fast enough, did not 0:10:22.120 --> 0:10:25.520 react fast enough that advice from his vest a couple 0:10:25.559 --> 0:10:28.080 of years ago. And here we are, So is there 0:10:28.120 --> 0:10:31.640 a problem, yes, Does the investment trust sector needs to 0:10:31.679 --> 0:10:37.160 find a way out of that problem? Yes? But is 0:10:37.240 --> 0:10:41.520 saba the answer? Is Sabah the answer the solution to 0:10:41.600 --> 0:10:45.920 that problem? And I would say so far in part yes, 0:10:46.280 --> 0:10:49.000 because here we are having this conversation. Here we are 0:10:49.040 --> 0:10:53.400 having it and already, you know, the trust that that 0:10:53.720 --> 0:10:56.400 has targeted are already putting forward while they would wouldn't 0:10:56.400 --> 0:11:00.880 they putting forward various strategies to deal with that strategy, 0:11:00.920 --> 0:11:03.680 a strategic review from one of them putting dividends up, 0:11:03.720 --> 0:11:09.240 offering cashis Exitt's talking more about discount management. Their Edinburgh 0:11:09.240 --> 0:11:11.720 Worldwide Trust has been talking about a big capital return 0:11:11.840 --> 0:11:17.600 next year, BG Growth actually nothing one of the others, 0:11:17.640 --> 0:11:21.760 and nothing Herald, nothing but Keystone has put in place 0:11:21.840 --> 0:11:24.000 or was attempting to put in place a full cash 0:11:24.040 --> 0:11:27.439 exit for everyone, which now it can't really do because 0:11:27.480 --> 0:11:29.840 of this business with SABA, who aren't going to vote 0:11:29.880 --> 0:11:32.400 for it. So they are now putting in place some 0:11:32.640 --> 0:11:35.120 things and you'll see other trust in the market looking 0:11:35.120 --> 0:11:37.160 around and going, wow, we might be next. We got 0:11:37.160 --> 0:11:39.760 to do something and really stepping up by bags or 0:11:39.760 --> 0:11:42.640 certainly talking about stepping up by bags. So we have 0:11:42.720 --> 0:11:46.280 a catalyst here. We have a catalyst that is forcing 0:11:46.400 --> 0:11:50.000 boards to sit down and say, what can we do 0:11:50.400 --> 0:11:54.000 to deal with these structural structural discounts. And it's very 0:11:54.040 --> 0:11:56.120 hard to turn around performance in five minutes, right, but 0:11:56.160 --> 0:11:59.559 you can maybe do something about the discounts and if 0:11:59.559 --> 0:12:02.040 you can't. If you can't, let's say you buy back 0:12:02.080 --> 0:12:04.240 and buy back and buy back and buy back, and 0:12:04.280 --> 0:12:07.160 that it can't remain and your trust becomes very small. 0:12:07.200 --> 0:12:09.079 Well maybe that's just the way it is, right. 0:12:09.640 --> 0:12:13.959 Yeah, I mean I think the the most obvious value 0:12:14.280 --> 0:12:17.400 that SABA has added is to put a rocket up 0:12:17.480 --> 0:12:21.760 the backside of the sector. You know. I think that 0:12:22.240 --> 0:12:24.440 I don't think really can be argued with, and to 0:12:24.480 --> 0:12:27.200 be fair, I don't think anyone really is arguing with it. 0:12:27.520 --> 0:12:33.240 You know, like these trusts have taken action. The other 0:12:33.320 --> 0:12:36.240 trusts that are sort of on the hit list, some 0:12:36.320 --> 0:12:38.960 of them are taking action or at least talking about it. 0:12:40.040 --> 0:12:43.640 And I think that that in itself is good because 0:12:44.040 --> 0:12:46.839 also you know, it draws attention to the sector. But 0:12:46.960 --> 0:12:49.960 the UK capital market as a whole we've been complaining 0:12:50.000 --> 0:12:53.320 about for quite a while and you know whatever, you know, 0:12:53.360 --> 0:12:57.960 it's had nearly four years worth now consecutive withdrawals. But 0:12:58.040 --> 0:13:01.040 the point is that this sort of thing where somebody's 0:13:01.080 --> 0:13:03.000 noticing the value and it's happening. You know, It's like 0:13:03.040 --> 0:13:05.560 I mean, Herald has gone from trading on a discount 0:13:05.559 --> 0:13:06.920 of I think it was you know, it was around 0:13:06.960 --> 0:13:09.400 about ten percent for most of last year and now 0:13:09.400 --> 0:13:11.640 he's trading on the premium were like one point five percent. 0:13:12.559 --> 0:13:15.720 And to be fair, I mean, Herald is probably one 0:13:15.760 --> 0:13:19.520 of the most well one of the trusts on this 0:13:19.640 --> 0:13:21.680 list that I would sort of feel it would be 0:13:21.760 --> 0:13:24.520 a shame if it was taking over. We can discuss 0:13:24.559 --> 0:13:26.400 that in a moment, but the point is, you know, 0:13:26.440 --> 0:13:28.480 it was trading a persistent discount and now it's not. 0:13:29.120 --> 0:13:32.600 So Saba has been good for shareholders in that trust 0:13:33.080 --> 0:13:35.040 and then all the other trusts because they've all kind 0:13:35.040 --> 0:13:38.559 of seen their discounts closed. So it's definitely been value 0:13:38.679 --> 0:13:42.360 to that. And I think the only question from the 0:13:42.760 --> 0:13:44.760 from the ultimate point of view of our listeners, I 0:13:44.760 --> 0:13:48.200 guess who you know are the people who hold investments 0:13:48.200 --> 0:13:51.600 in these trusts, you kind of retail investor, what does 0:13:52.040 --> 0:13:55.199 what's the next step and what does it mean for them, 0:13:55.360 --> 0:13:58.320 you know, if SABA wins or if Saba doesn't win. 0:14:00.440 --> 0:14:02.640 And from that point of view, I think that's where 0:14:02.640 --> 0:14:05.560 it gets slightly more complicated, just because you know, at 0:14:05.600 --> 0:14:06.840 the end of the day, if you were fed up 0:14:06.840 --> 0:14:08.840 weight Herald and you were waiting for the discount to 0:14:08.840 --> 0:14:10.679 close before you got out well, you know that it's 0:14:10.720 --> 0:14:15.960 your chance. You know, you should sell today done. 0:14:13.520 --> 0:14:16.720 You know at absolutely, but. 0:14:16.640 --> 0:14:18.840 Also you know, I would also like to know, for example, 0:14:18.880 --> 0:14:22.040 if you were in Keystone, which is you know, I 0:14:22.120 --> 0:14:25.000 don't think again, I don't think even you know, the 0:14:25.120 --> 0:14:30.200 chairperson would argue the performance in that has been back. 0:14:30.840 --> 0:14:34.160 So apart of me also does wonder, like, what what 0:14:34.200 --> 0:14:37.360 are you thinking if you are currently a Keystone shareholder? 0:14:37.920 --> 0:14:39.960 Why why is it still on your portfolio at all? 0:14:40.560 --> 0:14:42.320 You know, It's like I do think there's got to 0:14:42.320 --> 0:14:45.400 be an element the people taking responsibility here because one 0:14:45.400 --> 0:14:47.480 of the things that we keep that so everyone keeps 0:14:47.480 --> 0:14:50.080 talking about is that there are a lot of retail 0:14:50.120 --> 0:14:55.080 shareholders on these registers, so a lot of retail shareholders 0:14:55.160 --> 0:14:57.520 own them. And one of the arguments is that SABA 0:14:57.560 --> 0:14:59.760 has come along and because you need to get fifty 0:14:59.760 --> 0:15:02.960 percent of however, many votes are cast, so abbas get 0:15:03.000 --> 0:15:05.800 like thirty percent already or nearly thirty percent in most 0:15:05.800 --> 0:15:09.240 of these trusts, and so when it goes in and votes, 0:15:10.080 --> 0:15:12.800 if most of the retail shareholders don't turn hop, then 0:15:12.840 --> 0:15:16.440 they're automatically going to win. And obviously people keep saying, well, 0:15:16.520 --> 0:15:19.480 retail shareholders are apathetic, but I'm not sure. I don't 0:15:19.600 --> 0:15:22.000 I don't actually really understand that you have to be 0:15:22.040 --> 0:15:24.720 a fairly active investor to have ended up in any 0:15:24.760 --> 0:15:27.000 of these seven. You have to be someone that chose 0:15:27.080 --> 0:15:29.800 to buy them. You're not getting put into this by 0:15:29.800 --> 0:15:34.080 your auto enrollment pension. So if you if you don't 0:15:34.120 --> 0:15:36.400 go out and vote, or if you don't even you know, 0:15:36.400 --> 0:15:38.120 if you don't have an opinion and you're not aware 0:15:38.160 --> 0:15:40.400 of this, then what are you doing with your portfolio? 0:15:40.680 --> 0:15:43.560 It's like, why is this stuff there and you don't 0:15:43.600 --> 0:15:47.280 know about it? I mean, it's not that hard to vote. 0:15:47.480 --> 0:15:49.960 Yeah, but it's interesting John on this business of voting 0:15:49.960 --> 0:15:51.200 and that several people have said to me in the 0:15:51.240 --> 0:15:53.960 last couple of days, this is so awful because poor 0:15:54.000 --> 0:15:57.080 retail investors, it's so hard for them to vote. Well, 0:15:57.080 --> 0:16:01.120 it kind of isn't interactive investors operating and opt out 0:16:01.160 --> 0:16:05.760 rather than an opt in system. For years now, Huggers, Landown, Ajball, etcetera. 0:16:05.800 --> 0:16:08.160 They all have very efficient voting systems. If you want 0:16:08.160 --> 0:16:11.760 to vote, you can vote now. If people don't vote 0:16:11.760 --> 0:16:13.320 in this, I think it'd be very interesting and then 0:16:13.360 --> 0:16:14.960 you and I can do lots of great podcasts on 0:16:14.960 --> 0:16:18.440 shareholder democracy and what's wrong, howe you able should get 0:16:18.440 --> 0:16:20.640 on with it, etc. But I have had one from 0:16:20.840 --> 0:16:24.480 the share Society, an email from them about the problems 0:16:24.480 --> 0:16:26.840 with the nominee system. I either way that your shares 0:16:26.880 --> 0:16:29.440 are held on platforms, so you don't hold them directly, 0:16:29.480 --> 0:16:31.600 the platform holds them for you, and ownership bus is 0:16:31.640 --> 0:16:36.400 slightly fuzzy, and they believe that there are problems with communications, 0:16:36.400 --> 0:16:40.120 so it's actually very hard for trust boards to directly 0:16:40.160 --> 0:16:42.720 contact shareholders. So I would say the main problem there 0:16:42.840 --> 0:16:46.280 is communication, and if I were to be allowed to 0:16:46.360 --> 0:16:49.920 reform this system, I would try and make it easier 0:16:49.960 --> 0:16:52.960 for companies and trust of course our companies to communicate 0:16:53.000 --> 0:16:55.760 directly with their own shareholders, even if they hold their 0:16:55.800 --> 0:16:56.680 shares on platforms. 0:16:56.800 --> 0:16:58.320 You're rate well because a lot of this. I mean, 0:16:58.320 --> 0:17:01.240 I've never ever seen account pain as aggressive as this 0:17:01.800 --> 0:17:05.240 to get shareholders vote, which again I think is yet 0:17:05.280 --> 0:17:09.400 another indicator of you know, some of the potential problems 0:17:09.440 --> 0:17:11.840 in the sector. It's like you all waits, so now 0:17:11.880 --> 0:17:14.080 that your job's at risk, you're getting the thing out 0:17:14.119 --> 0:17:16.120 of it to make sure that you know your your 0:17:16.119 --> 0:17:19.840 shareholders coming vote. I'm fascinated to see what the ton 0:17:19.840 --> 0:17:21.800 out is like, because I think that it will be 0:17:21.840 --> 0:17:25.439 a really strong test of the points that you know 0:17:25.840 --> 0:17:30.800 in your book about shareholder democracy share you know, I think, 0:17:30.800 --> 0:17:32.720 and nicely, it's really exciting from that point of view. 0:17:32.720 --> 0:17:35.520 I mean, you know, very much looking forward to it exactly. 0:17:36.440 --> 0:17:38.800 I know, I'm slightly embarrassed about being excited about it, 0:17:38.840 --> 0:17:40.960 because really, you know, I should be horrified and bold, etcetera. 0:17:40.960 --> 0:17:43.720 I'm kind of excited. Okay, So that's voting out the 0:17:43.720 --> 0:17:46.600 way why you should do it, et cetera. So now 0:17:46.640 --> 0:17:51.320 the question is what should you do? How should you vote? 0:17:51.680 --> 0:17:53.760 What is Saba asually trying to do here? And I 0:17:53.800 --> 0:17:57.720 did have got him the emails relentless, John. I had 0:17:59.359 --> 0:18:01.600 one from them in the sector who said that day, 0:18:01.640 --> 0:18:03.800 you know, what Saba is doing is perfectly valid, but 0:18:03.880 --> 0:18:07.080 he really wishes that Boras Swinstein would drop the mom 0:18:07.119 --> 0:18:09.600 and pop stuff and all the talk about how he's 0:18:09.600 --> 0:18:12.800 the white knight and the defender of the retail investor 0:18:12.840 --> 0:18:15.240 and all that stuff, when all he's actually doing is 0:18:15.280 --> 0:18:20.840 a perfectly reasonable arbitrage, that's it, and he's doing it ruthlessly. 0:18:21.080 --> 0:18:25.439 He's using these discounts of the difference between the navy 0:18:25.480 --> 0:18:28.159 and the market price, and at the same time to 0:18:28.240 --> 0:18:30.840 gather assets. And if you look at the asset gathering 0:18:30.880 --> 0:18:35.080 part of it. We had some communication with Karen Braid, 0:18:35.119 --> 0:18:38.720 the share of Cheek Keystone, and her core question is 0:18:39.080 --> 0:18:41.560 if you are the white Knight, if you are the 0:18:41.600 --> 0:18:45.560 great protector of the retail investor. Keystone has already offered 0:18:45.840 --> 0:18:49.359 a full cash exit for all shareholders who want it 0:18:49.400 --> 0:18:51.640 at net hash and value minus one percent one percent, 0:18:51.680 --> 0:18:54.720 obviously being too to pay all the expenses of doing 0:18:54.720 --> 0:18:58.200 the whole thing, etc. Now, as that is already on 0:18:58.240 --> 0:19:01.639 the table, if Saber wants everyone to get out at 0:19:01.680 --> 0:19:05.600 full value, why are they stopping this happening? Why stop 0:19:05.680 --> 0:19:09.359 Keystone investors reclaiming their funds first? And then if you 0:19:09.520 --> 0:19:11.439 then people who don't you want to go to your 0:19:11.480 --> 0:19:14.440 own offering, then they're left over for you. If you're 0:19:14.520 --> 0:19:17.000 not doing that, it'd rather suggest that the whole thing 0:19:17.040 --> 0:19:19.119 that you're trying to do with Keystone at least is 0:19:19.200 --> 0:19:22.080 simply to gather assets in order to reap the fees 0:19:22.119 --> 0:19:22.760 from that later. 0:19:23.040 --> 0:19:25.000 I have struggle to see what what is the I 0:19:25.000 --> 0:19:26.399 don't know where the comebacks to that. 0:19:27.160 --> 0:19:28.640 I don't know, but all about it. You just want 0:19:28.680 --> 0:19:31.840 to interrupt because I'm slightly concerned that Boas is listening 0:19:31.880 --> 0:19:34.159 to this. Boas, I would like you to send your 0:19:34.200 --> 0:19:35.520 hate mail to John. 0:19:37.280 --> 0:19:38.120 You're doing Twitter. 0:19:38.760 --> 0:19:42.359 It's but on Twitter is going to come to me. 0:19:43.000 --> 0:19:49.199 Oh yeah, that's the point. Okay, Yeah, said, but I 0:19:49.200 --> 0:19:52.639 think that's that's not a non field point. Okay, But 0:19:52.720 --> 0:19:55.119 the moment pops off is part of the rulessness. You know, 0:19:55.240 --> 0:19:58.679 it's gonna it's a negative sales page either. If if 0:19:58.720 --> 0:20:03.160 you argue that the relying and shareholder apathy, then on 0:20:03.280 --> 0:20:05.880 the flip side of that is, well why are they 0:20:05.880 --> 0:20:09.600 coming on like this podcast? I would keep quiet. You know. 0:20:09.600 --> 0:20:11.840 If I was relying on shareholder apathy, then I'm not 0:20:11.880 --> 0:20:15.480