Herald shakes off Saba with move to Aberdeen Investments
The trust delivers a surprise outcome for followers of the Saba saga.
7th May 2026 10:33
by Dave Baxter from interactive investor
Global small-cap trust Herald Ord (LSE:HRI) plans to carry out a chunky tender offer and hand its portfolio management to Aberdeen Investments in a bid to shake off US activist Saba Capital.
Proposals subject to shareholder approval would see the £1.4 billion trust carry out a tender offer for up to 66% of its share capital at net asset value (NAV) minus costs.
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Half of this could be taken in an in-specie transfer of the company’s investments, which should prevent the need for Herald to sell down its less liquid assets. Saba has elected to exit the trust as part of the tender offer while also entering into a three-year standstill agreement barring it from further hostile actions.
The trust meanwhile plans to switch its investment manager from Herald Investment Management to Aberdeen Investments, although long-standing manager Katie Potts will remain at the helm.
Herald Worldwide Technology B (B51DS86), an open-ended fund run by Herald, also seeks to switch over to Aberdeen subject to regulatory permissions. This is expected to take effect in the third quarter.
The Herald trust’s board stressed the continuity of its investment approach as part of these proposals. It also argued that Aberdeen’s resources should provide it with a “platform for growth”, although the tender offer could diminish the trust’s scale.
Aberdeen steps in
The standstill agreement, the kind of which we have previously seen made between Saba and BlackRock, means the activist will not put forward proposals for consideration at the company’s meetings, seek to change the composition of the board or “seek to control or influence the board or company or the policies or management of the company” during that period.
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Aberdeen also said that it and Saba had agreed to apply a similar standstill arrangement for eight trusts whose portfolios it manages, should their boards opt for this. The Association of Investment Companies (AIC) site lists Aberdeen as the investment manager on eight trusts including Murray International Ord (LSE:MYI), Aberdeen Asia Focus PLC (LSE:AAS), Dunedin Income Growth Ord (LSE:DIG) and Aberdeen Equity Income Trust (LSE:AEI).
The development may offer hope to some of the trusts still in Saba’s sights, especially after the activist successfully managed to oust the board of Edinburgh Worldwide Ord (LSE:EWI) last week.
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