WEBVTT - How Saba's Boaz Weinstein Plans to Transform UK Investment Trusts 0:00:02.720 --> 0:00:16.920 Bloomberg Audio Studios, Podcasts, radio News. Welcome to Maren Talks 0:00:16.920 --> 0:00:19.520 Money the podcast and people who know the markets Explain 0:00:19.600 --> 0:00:22.200 the markets. I'm Meren some set web. This week we 0:00:22.280 --> 0:00:25.280 are doing things slightly differently. First of all, it is 0:00:25.320 --> 0:00:27.560 not me who interviewed our main guests for the week, 0:00:27.560 --> 0:00:29.760 but in fact it was John. I'll explain to you 0:00:29.800 --> 0:00:32.720 why in a minute. Also, we're dropping the episode slightly 0:00:32.760 --> 0:00:36.760 early because it's got rather more immediate news value than usual. Right, 0:00:37.280 --> 0:00:40.680 So this podcast is all about investment trusts, which are 0:00:40.720 --> 0:00:44.239 effectively companies, the business of which is to invest in 0:00:44.320 --> 0:00:47.159 other companies. They're an awful lot of them listed in 0:00:47.240 --> 0:00:49.960 the UK. They give investors, who are of course also 0:00:50.159 --> 0:00:54.320 shareholders in the companies, access to everything from private equity 0:00:54.360 --> 0:00:59.440 to UK equity income, to smaller companies, emerging markets, Japanese equities, 0:00:59.480 --> 0:01:02.200 just to name few things available. They have a few 0:01:02.240 --> 0:01:05.360 advantages over regular investment funds. They can borrow to invest 0:01:05.360 --> 0:01:09.200 for example, and crucially, just like other listed companies, they 0:01:09.200 --> 0:01:12.360 have boards of directors whose job it is to represent 0:01:12.440 --> 0:01:16.200 the interests of shareholders or investors. So here's the thing. 0:01:16.560 --> 0:01:18.720 In the last few years, the sector has not been 0:01:18.720 --> 0:01:21.440 doing so well, the shares have on average been trading 0:01:21.440 --> 0:01:24.560 at historically high discounts to their net asset value, something 0:01:24.560 --> 0:01:26.840 that suggests a lack of demand for the shares, and 0:01:26.880 --> 0:01:29.200 the underlying performance in a couple of cases hasn't been 0:01:29.319 --> 0:01:35.039 great either. So enter US activist investor SABA Capital. About 0:01:35.040 --> 0:01:38.080 a year ago, Boas Einstein, the founder of SABA, noticed 0:01:38.080 --> 0:01:41.400 the large discounts in the sector, sometimes up to around 0:01:41.400 --> 0:01:44.800 twenty percent, meaning that you could effectively buy the assets 0:01:44.800 --> 0:01:47.160 in the portfolio at a twenty percent discount of their 0:01:47.360 --> 0:01:50.600 market value. Saba started buying the shares in seven of 0:01:50.640 --> 0:01:53.000 The trustee now has stakes ranging from nineteen to twenty 0:01:53.080 --> 0:01:55.600 nine percent, enough for him to call for general meetings 0:01:55.640 --> 0:01:58.320 at all seven to replace the current board and replace 0:01:58.360 --> 0:02:01.280 them with his own people. Well, you will know these trusts, 0:02:01.320 --> 0:02:02.600 or at least you'll have heard of some of them. 0:02:02.600 --> 0:02:06.040 There's Herald Investment Trust, Edinburgh, Worldwide, Bailey give a US Growth, 0:02:06.080 --> 0:02:09.239 so big names in the sector. In this podcast, John 0:02:09.280 --> 0:02:11.720 Stirbeck talks to bos wy Inside about why he's doing this, 0:02:11.960 --> 0:02:14.480 why he's interested in UK investment trusts, and what investors 0:02:14.520 --> 0:02:18.000 can expect if he succeeds. Two more things First, regular 0:02:18.040 --> 0:02:19.600 listeners will know that I sit on the board of 0:02:19.600 --> 0:02:21.680 a couple of investment trusts. Neither I hears him to 0:02:21.680 --> 0:02:23.720 add or among the seven, but nonetheless, as I have 0:02:23.760 --> 0:02:25.560 skin in the sector game, John and I figured it 0:02:25.600 --> 0:02:29.080 was best if he did the interview. Second, this is 0:02:29.160 --> 0:02:32.399 a test of shareholder democracy. The platforms have all made 0:02:32.480 --> 0:02:34.440 major efforts to make it easy for you to vote 0:02:34.480 --> 0:02:36.520 on the shares that you own. Now's your chance to 0:02:36.560 --> 0:02:40.120 do so. Have your say either way. Over to John. 0:02:45.080 --> 0:02:47.000 Great to have you in the Shaw Boys look forward 0:02:47.040 --> 0:02:49.680 to hearing all about this because obviously it's caused a 0:02:49.800 --> 0:02:52.000 big start or what he had in there the UK. 0:02:52.639 --> 0:02:55.280 But before we get into your campaign, do you want 0:02:55.320 --> 0:02:57.639 to tell us a bit about yourself and about your 0:02:57.680 --> 0:03:01.240 background and a boit Saba and it came about. 0:03:02.280 --> 0:03:05.119 Sure, so thanks for having me. I worked on Wall 0:03:05.160 --> 0:03:07.960 Street ever since I was fifteen years old. I was 0:03:08.040 --> 0:03:10.520 very lucky to get a summer job, and thirty six 0:03:10.600 --> 0:03:14.400 years later, the excitement of the ever changing nature of 0:03:14.480 --> 0:03:19.440 markets and mispricings and arbitrage really stays fresh with me. 0:03:19.520 --> 0:03:22.160 And I first started out working at a couple of 0:03:22.200 --> 0:03:26.240 banks and then in nine I started SABA. I had 0:03:26.280 --> 0:03:29.360 spent the weekend of Lehman Brothers failure at the New 0:03:29.440 --> 0:03:32.440 York fed which was one of the most dramatic nights 0:03:32.480 --> 0:03:34.480 of my life. And I got to see a lot 0:03:34.520 --> 0:03:38.080 of crazy things over the years. I was trading when 0:03:38.160 --> 0:03:41.200 the towers were hit by the nine to eleven attacks 0:03:41.240 --> 0:03:44.360 and actually spoke on the phone with someone in the 0:03:44.400 --> 0:03:48.520 towers the lines were working, who was asking for help 0:03:48.600 --> 0:03:50.720 and advice. And just to have been there at the 0:03:50.760 --> 0:03:54.160 moments in history, whether it's financial history or global history, 0:03:54.440 --> 0:03:58.000 but to be a trading risk has been an incredible experience. 0:03:58.400 --> 0:04:00.480 Just one thing. Though, you said you started Wall Street 0:04:00.520 --> 0:04:03.840 when you were fifteen. That's quite precocious. How did that 0:04:03.880 --> 0:04:04.360 come about? 0:04:04.880 --> 0:04:06.440 There's a lot of luck in everything. 0:04:06.680 --> 0:04:09.440 And I happened to have been walking by the job 0:04:09.480 --> 0:04:11.880 postings in my high school and there was a woman 0:04:12.160 --> 0:04:14.720 who had gone to a similar school who needed somebody 0:04:14.800 --> 0:04:15.720 at a deep voice. 0:04:15.920 --> 0:04:17.520 As I talked to you today, my voice. 0:04:17.400 --> 0:04:20.279 Was actually quite unusually raspy, but I had a similar 0:04:20.400 --> 0:04:22.800 voice when I was fifteen. And she was a very 0:04:22.800 --> 0:04:26.520 successful financial consultant named Jeanine Crane. Her mother actually was 0:04:26.520 --> 0:04:28.880 one of the top ten brokers and Merrill Lynch and 0:04:28.960 --> 0:04:31.920 this team needed someone to make appointments for them, and 0:04:31.960 --> 0:04:35.240 I got to sit there and listen to research channelists 0:04:35.279 --> 0:04:38.400 talk about stocks, and I just had the most incredible 0:04:38.440 --> 0:04:41.520 experience and things build on each other, and I was 0:04:41.560 --> 0:04:45.880 able to parlay it into a interview at Goldman Stacks 0:04:46.600 --> 0:04:48.400 and I was able to get a summer job on 0:04:48.440 --> 0:04:50.279 the trading floor when I was nineteen. 0:04:50.640 --> 0:04:54.000 Well, fantastic experience. So you found it SABA in two 0:04:54.080 --> 0:04:56.440 thousand and nine. Tell us a bit more about that 0:04:56.640 --> 0:05:00.279 and how you eventually came to focus on c closed 0:05:00.400 --> 0:05:03.560 end finds in the US. Closed end finds are basically 0:05:03.839 --> 0:05:06.120 what we call investment trusts in the UK. 0:05:07.040 --> 0:05:09.600 Yeah, let's call it investment trust Today. I can deal 0:05:09.680 --> 0:05:14.000 with the cross continental differences, so we can even say 0:05:14.040 --> 0:05:16.840 tomatow if you make me so right now, I think 0:05:16.839 --> 0:05:19.440 I'm having some thrown at me by some of my adversaries. 0:05:20.040 --> 0:05:20.480 Possibly. 0:05:21.200 --> 0:05:21.560 Yeah. 0:05:21.880 --> 0:05:25.400 I started SAVA in a very difficult time for markets. 0:05:25.520 --> 0:05:29.120 I started amidst the ashes of Lehman Brothers, the global 0:05:29.120 --> 0:05:32.760 financial crisis. Bernie madeoff and I started very modestly. We 0:05:32.880 --> 0:05:35.120 raised one hundred and sixty million by the time we 0:05:35.240 --> 0:05:39.960 launched August nine, and then because of I would say determination, 0:05:40.320 --> 0:05:43.920 force of will, and being able to convey a story 0:05:44.240 --> 0:05:48.120 about the opportunity in relative value trading. We're not a 0:05:48.120 --> 0:05:51.119 long biased investor. For the most part, I was able 0:05:51.160 --> 0:05:54.480 to take the firm from its humble beginnings. We got 0:05:54.560 --> 0:05:57.080 up to about five and a half billion by March 0:05:57.120 --> 0:06:00.440 twenty twelve, which was really quite a feat. But our strategy, jeez, 0:06:00.680 --> 0:06:04.839 have really evolved from more narrowly focused on the credit 0:06:04.880 --> 0:06:08.279 markets and credit against equity and having now moved for 0:06:08.320 --> 0:06:11.800 the past more than a decade into different kinds of 0:06:12.240 --> 0:06:15.760 arbitrage that we hadn't done before, namely investment trusts. 0:06:16.160 --> 0:06:19.880 Okay, so targetting closed end funds and presumably that's to 0:06:19.920 --> 0:06:23.080 try and narrow the discount. Is that your primary goal? 0:06:24.400 --> 0:06:24.719 Yeah? 0:06:24.880 --> 0:06:28.760 So while there are managers that have alpha, these funds 0:06:29.240 --> 0:06:32.520 in the main have destroyed value bit by bit through 0:06:32.600 --> 0:06:36.080 either high fees, which some funds have but not necessarily 0:06:36.160 --> 0:06:39.120 the ones that we're talking about today, or poor performance 0:06:39.200 --> 0:06:41.640 because of whether it's a b team that's running it 0:06:41.680 --> 0:06:45.120 for a big institution rather than the top people, or 0:06:45.320 --> 0:06:49.840 just bad luck, bad decisions, or really investors feeling like 0:06:49.960 --> 0:06:51.760 they want out of this product. And they want to 0:06:51.760 --> 0:06:55.920 go into more popular products like ETFs. Funds can trade 0:06:55.920 --> 0:06:58.000 a big discounts, and that is what attracted me. It 0:06:58.040 --> 0:07:01.320 wasn't the chance to invest a lot inside a manager. 0:07:01.320 --> 0:07:03.880 It was the chance to buy a pound for eighty 0:07:03.880 --> 0:07:05.880 five p and turn it back into a. 0:07:05.839 --> 0:07:10.400 Pound over here. For investment trusts, there's a lot of retail. 0:07:10.440 --> 0:07:11.080 There's a lot of. 0:07:11.320 --> 0:07:14.680 Private investors, small shareholders in the US. Is it like 0:07:14.720 --> 0:07:18.680 that or does it work institutional holders for your particular funds. 0:07:19.480 --> 0:07:21.520 So the closed end funds in the US or the 0:07:21.520 --> 0:07:24.560 investment trusts in the UK that we buy are held 0:07:24.920 --> 0:07:28.440 very much by retail investors. There can be institutions in them, 0:07:28.480 --> 0:07:31.880 and in fact there are in various funds that were 0:07:31.920 --> 0:07:35.000 invested here in the UK or in the US, but 0:07:35.320 --> 0:07:38.920 saba's investors. So the investors that come into our funds. First, 0:07:38.960 --> 0:07:41.680 we manage two closed end funds in the US, and 0:07:41.720 --> 0:07:44.120 we manage an ETF of closed end funds. Those are 0:07:44.120 --> 0:07:49.080 primarily retail investors, but our hedge funds are primarily institutional investors. 0:07:49.360 --> 0:07:51.600 They might be a pension fund in the US that 0:07:51.800 --> 0:07:56.160 is considered a sophisticated institution, but it represents tens of 0:07:56.160 --> 0:07:59.000 millions of retirees. So ultimately we are getting back to 0:07:59.040 --> 0:08:00.720 mom and pop no matter how you look at it. 0:08:00.960 --> 0:08:05.040 And I think it's worth adding that actually our second 0:08:05.280 --> 0:08:10.119 most popular country to invest in sabas after the US, 0:08:10.280 --> 0:08:15.080 is the UK. We have significant institutional investors upwards of 0:08:15.240 --> 0:08:17.920 single tickets of three or four hundred million dollars from 0:08:17.960 --> 0:08:19.280 some UK institutions. 0:08:19.520 --> 0:08:24.320 Okay, again to your actual campaign and the focus on 0:08:24.400 --> 0:08:28.040 the UK. Why are the UK specifically and why now? 0:08:28.400 --> 0:08:31.080 Is that something that particularly caught your eye. 0:08:31.600 --> 0:08:34.960 Yes, So we started investing in closed in funds for 0:08:35.000 --> 0:08:38.560 the firm in twenty and thirteen, so we're up on 0:08:38.600 --> 0:08:41.640 eleven years now, and I'd invested in them personally very 0:08:41.640 --> 0:08:44.040 long time ago, so knew quite a bit about them. 0:08:44.320 --> 0:08:47.120 But so the UK was something where they've been a 0:08:47.160 --> 0:08:49.520 trade or two to do from the very beginning, but 0:08:49.559 --> 0:08:53.240 not not really something more than that until three years ago. 0:08:53.440 --> 0:08:54.880 So I want to break that down for you. 0:08:55.120 --> 0:08:57.880 We had spent the first in years squarely focused in 0:08:57.880 --> 0:09:00.880 the US. We've been had as much some time investment 0:09:00.880 --> 0:09:02.800 in Australia than we as we had in the UK. 0:09:03.000 --> 0:09:07.400 Why Because, to the UK's credit, the governance of the funds, 0:09:08.280 --> 0:09:12.440 the rules of how they treat their shareholders was quite 0:09:12.440 --> 0:09:14.840 a bit better than the US. There are things that 0:09:15.080 --> 0:09:17.520 are done in the US to the investors by the 0:09:17.559 --> 0:09:20.040 manager that it would just shock you. So the better 0:09:20.080 --> 0:09:22.599 governance was appealing to us. But there wasn't much of 0:09:22.640 --> 0:09:26.439 a discount because of that governance. Because the industry, which 0:09:26.480 --> 0:09:28.160 is one hundred and fifty years old in the UK, 0:09:28.640 --> 0:09:31.440 had done a better job of treating its investors. That 0:09:31.679 --> 0:09:34.600 led to funds trading better. The industry grew and the 0:09:34.679 --> 0:09:36.800 UK was about as big as the US, even bigger 0:09:37.240 --> 0:09:39.199 until three years ago. So I want to put a 0:09:39.240 --> 0:09:41.000 pin in that and then tell you what happened over 0:09:41.040 --> 0:09:43.440 the past three years, which is why we jumped in. 0:09:43.880 --> 0:09:46.400 That's interesting. So you really actuallycing this back to twenty 0:09:46.480 --> 0:09:50.040 twenty one roundnet and the else because obviously we've been 0:09:50.400 --> 0:09:53.600 agonizing a lot in the UK about the UK stock 0:09:53.679 --> 0:09:57.559 market generally and the idea that is praiced a discount 0:09:57.720 --> 0:10:01.480 to markets more broadly, and obviously particularly the US, because 0:10:01.480 --> 0:10:03.679 the US has beaten everything. But what why is it 0:10:03.800 --> 0:10:08.400 you feel happened in twenty twenty one that particularly made 0:10:08.400 --> 0:10:09.560 everything worse. 0:10:09.880 --> 0:10:13.240 Yeah, So first, just so everyone understands a lot of 0:10:13.240 --> 0:10:16.120 these funds. In fact, the ones that we own not 0:10:16.240 --> 0:10:19.120 just UK stocks. In fact, they might own majority US 0:10:19.160 --> 0:10:23.000 they might own Nvidia and Tesla, let's say, and so 0:10:23.320 --> 0:10:26.200 their collection. What are these investment trusts? For anyone listening 0:10:26.200 --> 0:10:28.200 it doesn't really know much about it. They are a 0:10:28.200 --> 0:10:32.120 collection of assets managed by a manager, a venerable manager 0:10:32.120 --> 0:10:33.720 that was able to raise the money. 0:10:34.440 --> 0:10:35.720 And it's just a pool. 0:10:36.040 --> 0:10:38.800 And ettfs are much more common in the US these 0:10:38.880 --> 0:10:41.199 days because you can get out on of these notice 0:10:41.280 --> 0:10:44.760 at fair price at NAV and the fees are often half. 0:10:45.080 --> 0:10:48.240 But these investment trusts which own again a collection of stocks. 0:10:48.559 --> 0:10:52.240 In twenty twenty one, around the time that inflation was 0:10:52.679 --> 0:10:55.320 considered to be starting to be a problem and we 0:10:55.400 --> 0:10:58.920 had the LDI crisis in the UK, it created sellers 0:10:58.920 --> 0:11:02.440 of assets and there weren't really too many natural buyers. 0:11:02.600 --> 0:11:04.920 So what happened was the market went from very little 0:11:05.040 --> 0:11:08.520 or no discount to big discount. And we didn't know 0:11:08.880 --> 0:11:12.160 if that was a temporary feature because it wasn't generally 0:11:12.160 --> 0:11:14.360 true in the UK, and so we started to buy 0:11:14.400 --> 0:11:18.600 at eleven percent discount, thirteen percent discount, eighteen percent discount. 0:11:18.600 --> 0:11:22.120 Even some funds that at private holdings you could buy 0:11:22.160 --> 0:11:25.360 a twenty five percent discount, even forty percent discount if 0:11:25.400 --> 0:11:28.199 people really thought it was troubled. So you can get 0:11:28.480 --> 0:11:30.560 enormous discounts. And I want to just add one more point. 0:11:30.800 --> 0:11:33.960 This is not discount to someone's fair value about where 0:11:34.080 --> 0:11:37.480 UK stocks ought to be or ustoks. This is discount 0:11:37.559 --> 0:11:40.440 to the closing price. This is an actual discount, not 0:11:40.480 --> 0:11:44.400 a hypothetical discount. And so that's when we jumped in. 0:11:44.920 --> 0:11:47.080 And we had believed in the beginning that it was 0:11:47.120 --> 0:11:50.000 going to be transitory, that the discounts would go away, 0:11:50.200 --> 0:11:52.560 but instead it got worse. And I can take you 0:11:52.600 --> 0:11:54.920 through that three year timeline very briefly if you want. 0:11:55.200 --> 0:11:58.400 Yeah, absolutely well, first of all, just spail fort of them. 0:11:58.400 --> 0:12:02.360 So there are seven investment trust that you've targeted just now, 0:12:02.840 --> 0:12:06.760 and you've proposed and requisition general extraordinary general meetings at 0:12:06.760 --> 0:12:09.640 the seven of these with the aim of replacing the 0:12:09.679 --> 0:12:14.440 boards basically. And the funds are Bailey Gifford, US Growth, Keystone, 0:12:14.480 --> 0:12:17.320 Post of Change Investment Trust. All of those are Bailey Giffard. 0:12:17.800 --> 0:12:21.480 There's Jenis Henderson, which runs Henderson Opportunities Trust in the 0:12:21.480 --> 0:12:24.839 European Smaller Companies Trust and then the other two are 0:12:24.880 --> 0:12:30.800 CQS Natural Resources Growth and Income and Herald Investment Trust. Now, 0:12:31.480 --> 0:12:34.480 I suppose the thing that jumps out to me certainly 0:12:34.679 --> 0:12:40.240 is these trusts all our growthy trusts. Is there a 0:12:40.240 --> 0:12:42.800 particular reason why you've gone for that kind of area. 0:12:43.320 --> 0:12:45.880 Did the discount prey much greater because of their rise 0:12:45.920 --> 0:12:47.959 and interest rates for example, like some pople are pointed 0:12:48.000 --> 0:12:50.320 out that the last three years have been particularly bad 0:12:50.679 --> 0:12:53.240 for these kinds of trusts, or is there another reason 0:12:53.240 --> 0:12:53.800 behind that. 0:12:55.000 --> 0:12:56.880 No, we wake up every morning and we look at 0:12:56.920 --> 0:12:59.800 the five hundred different options for us that half of 0:12:59.800 --> 0:13:02.600 them are in the UK, almost half in the US, 0:13:02.640 --> 0:13:04.599 and then you have a little bit of Canada in Australia. 0:13:04.679 --> 0:13:06.560 We look at where are the biggest discounts, And so 0:13:06.800 --> 0:13:10.000 it's less what saba's view on the small cap equities 0:13:10.160 --> 0:13:12.720 and more where are the pressure points? Where are investors 0:13:12.760 --> 0:13:16.120 so frustrated that they'll sell these things at the biggest discounts. 0:13:16.160 --> 0:13:17.240 And I think it's all. 0:13:17.080 --> 0:13:20.520 Too convenient to say, oh, this hasn't been a period 0:13:20.520 --> 0:13:24.280 with rising interest rates that's been good for stocks, because 0:13:24.520 --> 0:13:27.040 look today at how well the markets have done. You 0:13:27.160 --> 0:13:30.320 started with the Bailey Gifford Fund maybe a UK institution, 0:13:30.679 --> 0:13:33.200 but the fund is called the ticker is USA. It 0:13:33.240 --> 0:13:36.560 owns US stocks. We know that when you hold Nvidia 0:13:36.720 --> 0:13:40.720 and Tesla and Microsoft, you're winning. But the shocking thing 0:13:41.080 --> 0:13:43.080 is that when I take these past three years and 0:13:43.120 --> 0:13:45.280 we strip out the discount, we just look at how 0:13:45.320 --> 0:13:48.680 did the stocks do in their portfolio. You have benchmarks 0:13:48.720 --> 0:13:52.000 that they themselves selected which are up a lot despite 0:13:52.080 --> 0:13:53.839 the points you made about higher rates. Look in the 0:13:53.920 --> 0:13:56.640 US at the s and p up near six thousand. 0:13:56.960 --> 0:13:59.679 Where was it three years earlier? And so investors went 0:13:59.720 --> 0:14:02.560 into the funds had all the expectation in the world 0:14:02.840 --> 0:14:05.120 that if markets went up, if stock markets went up, 0:14:05.160 --> 0:14:07.360 they would go up. If markets went down, they would 0:14:07.360 --> 0:14:09.680 go down. But we've seen a big bull market and 0:14:09.760 --> 0:14:13.720 here's the shaker. These seven funds the past three years 0:14:14.120 --> 0:14:17.680 have lost collectively, I'm not nitpicking on the worst one, 0:14:17.920 --> 0:14:22.040 have lost fourteen percent for their investors. And that's why 0:14:22.200 --> 0:14:25.920 investors are so frustrated. That's why these things went to 0:14:25.960 --> 0:14:28.120 big discount and state of big discount. It was because 0:14:28.120 --> 0:14:32.000 of on the average terrible performance. Let's call a spade 0:14:32.000 --> 0:14:35.440 a spade. If the portfolio loses fourteen percent and the 0:14:35.480 --> 0:14:36.840 market makes forty percent. 0:14:37.120 --> 0:14:38.640 You have a problem with your investors. 0:14:39.360 --> 0:14:42.120 You've kissed clayed them as the measurable seven, which is 0:14:42.200 --> 0:14:45.320 obviously quite a catchee. Can a phrase the reference in 0:14:45.360 --> 0:14:49.600 the magnificent seven? Obviously each individual trust has got different 0:14:50.200 --> 0:14:53.040 admirable performance in different fact there's been for examples, to 0:14:53.080 --> 0:14:56.160 take one that has been highlighted specifically, and I think 0:14:56.200 --> 0:14:59.520 you've actually acknowledged this herald investment trust as a kind 0:14:59.520 --> 0:15:04.760 of long and in sort of investor in smaller tech companies. 0:15:05.200 --> 0:15:08.400 And while yeah, it's maybe struggled over the past three years, 0:15:08.400 --> 0:15:12.680 it's it's got a very good long term track record 0:15:13.000 --> 0:15:15.560 and obviously quite a lot of loyalty because it's had 0:15:15.560 --> 0:15:17.640 to say manager for a very long period of time, 0:15:17.960 --> 0:15:22.520 and she's very highly respected. Do you think it's necessarily 0:15:22.560 --> 0:15:26.120 reasonable to be bracketing all of these kind of trust 0:15:26.200 --> 0:15:27.840 as miserable on. 0:15:27.720 --> 0:15:28.920 The average, they're miserable. 0:15:29.200 --> 0:15:31.400 So you're right, So let's talk about one of the 0:15:31.400 --> 0:15:34.840 best ones in terms of investors esteem. But I also 0:15:34.880 --> 0:15:37.800 want to tell you you're magnificent because you're willing to 0:15:37.840 --> 0:15:40.200 overlook three years of that reforming. 0:15:40.840 --> 0:15:43.640 I'm a long term investor. I'm a long term investor. 0:15:43.760 --> 0:15:45.960 Boy, I love it. 0:15:46.080 --> 0:15:48.560 You should come invest in our funds because because we 0:15:48.680 --> 0:15:50.560 live in a world where if we have one bad 0:15:50.640 --> 0:15:53.080 quarter or one bad year, you know, you make money 0:15:53.280 --> 0:15:55.960 for your clients, you raise money, you lose money, you 0:15:56.080 --> 0:15:58.600 lose investors, and you're willing to overlook. So I just 0:15:58.640 --> 0:16:01.720 pulled it up. So yes, So the average lost fourteen 0:16:01.760 --> 0:16:05.400 percent this fund. If I just take January first, twenty 0:16:05.440 --> 0:16:09.320 twenty two, okay, it's actually lost a little bit of money. 0:16:09.800 --> 0:16:12.480 Our US products that just owns these things. We just 0:16:12.520 --> 0:16:15.600 owned a bunch of closed end funds. It made forty percent. 0:16:15.840 --> 0:16:17.320 If I pull up the S and P, it's going 0:16:17.400 --> 0:16:19.920 to have made an ungodly amount of money. And actually, 0:16:20.280 --> 0:16:23.520 Miss Potts, her largest holding coming into this year twenty 0:16:23.560 --> 0:16:26.320 twenty four, became a Meme stock of stores. It went 0:16:26.400 --> 0:16:29.480 up three hundred percent. So somehow there are things in 0:16:29.480 --> 0:16:32.080 the portfolio that are just doing so poorly that you 0:16:32.120 --> 0:16:35.240 can have markets up so much, yet yet her portfolio 0:16:35.280 --> 0:16:37.000 lose a little bit of money. And this is what 0:16:37.040 --> 0:16:40.640 I would say. Her track record is fantastic since nineteen 0:16:40.720 --> 0:16:44.120 ninety four. Okay, I acknowledged it. And that's also why 0:16:44.320 --> 0:16:47.200 we decided to sweeten the offer for investors who may 0:16:47.400 --> 0:16:50.160 be attached and may be so forgiving that they don't 0:16:50.200 --> 0:16:52.960 care that the markets went up forty and they and 0:16:53.000 --> 0:16:55.360 they lost a little bit of money. And so we've 0:16:55.400 --> 0:16:58.960 offered in that fund that any investor that wants to 0:16:59.000 --> 0:17:02.120 get undred percent of their money back at ninety nine 0:17:02.360 --> 0:17:06.120 ninety nine, meaning ninety nine percent of asset value, they 0:17:06.160 --> 0:17:08.800 may do. So we would offer that to them, which 0:17:08.840 --> 0:17:12.640 is a style of governance that far exceeds the industry, 0:17:12.720 --> 0:17:14.520 not just in the US in the UK, which I'll 0:17:14.520 --> 0:17:16.680 explain in a minute, but let me just add that 0:17:16.960 --> 0:17:19.879 the closed end funds HRI when we started buying it 0:17:19.920 --> 0:17:22.520 in twenty twenty two, it was north of a twenty 0:17:22.600 --> 0:17:26.159 two percent discount. So as much as people love Katie, 0:17:26.320 --> 0:17:28.400 they didn't love her enough that there were no buyers 0:17:28.400 --> 0:17:31.640 willing to pay nineteen eighteen seventeen, and we were able 0:17:31.680 --> 0:17:34.560 to buy big stakes at double digit discounts all the 0:17:34.560 --> 0:17:37.639 way through until we showed up a month ago with 0:17:37.680 --> 0:17:38.600 a very big position. 0:17:38.640 --> 0:17:40.320 And so I pona just say one thing. 0:17:40.840 --> 0:17:43.840 We have helped thousands and thousands of mom and pop 0:17:43.880 --> 0:17:47.800 investors that own these things take their portfolio from seventy 0:17:47.840 --> 0:17:51.240 eight percent of NAV, the price has gone up significantly 0:17:51.640 --> 0:17:54.800 now to almost NAV thanks to our activism. 0:17:55.600 --> 0:17:59.240 I mean, do it. I think a lot of investors 0:17:59.280 --> 0:18:02.679 of quite excited about the fact that there is someone 0:18:02.800 --> 0:18:06.280 like Sabah and some of the other activists paying attention 0:18:06.600 --> 0:18:10.080 to the investment trust sector. I guess where I suppose 0:18:10.880 --> 0:18:15.720 some of the concerns that are whether this is essentially 0:18:15.760 --> 0:18:19.159 a time when the UK is out of favor, and 0:18:19.200 --> 0:18:24.240 it's one thing to be comparing the performance to the 0:18:24.400 --> 0:18:28.200 US market, but either the UK itself, as I said, 0:18:28.480 --> 0:18:31.240 is very well known that there's a wider kind of 0:18:31.240 --> 0:18:35.080 market down or on the UK, and this kind of 0:18:35.160 --> 0:18:38.800 macro environment has just been very bad for most things 0:18:38.800 --> 0:18:42.080 that are UK listed daft things like oil companies trading 0:18:42.080 --> 0:18:45.360 a massive discount to their equivalents in the US, even 0:18:45.400 --> 0:18:49.520 though they all basically own very similar assets and are 0:18:49.640 --> 0:18:52.560 very similar sort of strategies. And I guess that's the 0:18:52.640 --> 0:18:56.000 question is like, is good that you're drawing attention to 0:18:56.160 --> 0:19:01.840 the massive discounts in this area, but is it follow 0:19:01.920 --> 0:19:04.760 on that you would then be a better manage it 0:19:04.800 --> 0:19:05.600 all of these assets. 0:19:06.480 --> 0:19:07.399 That's a fair question. 0:19:07.880 --> 0:19:10.840 I think if you take a step back, SAVA has 0:19:10.840 --> 0:19:15.240 bought two billion euros worth of these funds. Okay, And 0:19:15.320 --> 0:19:17.960 when we look at the holder's list and what's been happening, 0:19:18.160 --> 0:19:20.760 and I can read articles that were in the Ft 0:19:20.960 --> 0:19:23.159 or in Bloomberg the last three years that were so 0:19:23.359 --> 0:19:26.360 negative on this sector. When we look at the holders list, 0:19:26.400 --> 0:19:29.840 we see all the top investors selling and only one 0:19:29.880 --> 0:19:34.120 institution buying us. So first, if we didn't buy, this 0:19:34.200 --> 0:19:37.480 market would be in much worse shape. Secondly, we do 0:19:37.560 --> 0:19:41.560 not come as American American hedge funds to go and 0:19:42.200 --> 0:19:45.720 cause trouble in the UK. We are equal opportunity. Okay, 0:19:46.200 --> 0:19:49.320 we're causing trouble as they see it in the US. Okay, 0:19:49.840 --> 0:19:53.679 tens of thousands across even a few funds, so hundreds 0:19:53.720 --> 0:19:56.480 of thousands if you put funds together of investors that 0:19:56.560 --> 0:20:00.199 have seen the benefits of us making their portfolio go 0:20:00.280 --> 0:20:03.280 back up to nev and the multiplier effect them the 0:20:03.400 --> 0:20:06.440 interest on interest, the time value of money has been 0:20:06.480 --> 0:20:10.560 so significant. So don't we not only have caused so 0:20:10.720 --> 0:20:13.760 far the portfolio to rise. But let's look a step further. 0:20:14.400 --> 0:20:18.560 If we're successful here, we would endeavor to bring the 0:20:18.600 --> 0:20:22.800 first investment trust to the UK that should allow investors 0:20:23.280 --> 0:20:28.440 to benefit from the opportunities in these discounts rather than 0:20:28.600 --> 0:20:30.800 suffer from it, rather than be a casualty of it. 0:20:30.920 --> 0:20:33.159 So we would have an investment trust made up of 0:20:33.760 --> 0:20:36.560 some of these seven which everyone's were successful in. And 0:20:36.600 --> 0:20:39.399 if we're given the mandate, where we would use our 0:20:39.480 --> 0:20:42.160 acumen to go in the market, find value, buy things 0:20:42.160 --> 0:20:44.960 at eighty six, turn them back into one hundred as 0:20:45.000 --> 0:20:46.600 we have in the US. You could see our track 0:20:46.600 --> 0:20:49.760 record in our US vehicles and that's a really exciting 0:20:49.800 --> 0:20:52.800 opportunity for many UK investors who want to profit from 0:20:52.800 --> 0:20:56.240 these discounts rather than suffer from it. And lastly, you 0:20:56.280 --> 0:20:59.119 could look at the portfolios as they are today. You 0:20:59.280 --> 0:21:01.679 again started with the one that's US based, even though 0:21:01.720 --> 0:21:04.000 it's Bailey Gifford. Money would be coming out of the 0:21:04.080 --> 0:21:07.280 US equity market and be put directly into what the 0:21:07.280 --> 0:21:10.320