Looks like it - will DLAR be next ? |
looks like Equals has been offloaded |
I'd say Saba are more motivated than we are here that the incentive fee is reasonable. With their short positions it is closer to a discount play and more fees are relative to that. With their shares and CRS associated shares presumably not voting to avoid conflicts of interest, then only a reasonable proposal should pass.
Taking the clock explicitly out here in the short term has got to be a good thing for sentiment. What proportion of investors actually have a 2+ year time horizon in 2021? |
kooba, that was my reading too. It's naive to suppose that the same incentive plan could incentivise them during the wind down. There has to be a different perspective.
Not sure about a 10p divi before they have exited Hurricane. They might need to engineer a bid with the other large shareholder. Take it private, if that's possible. CA have 28%, Kerogen 16%, |
As ever, the investment manager needs replacing. |
Doesn't say its just additional to the ongoing management fee ..a revised arrangement might just be more incentive linked to the new timescales. Subject to shareholder vote though so shareholders get to see and agree detail.Good news is a realistic timetable for disposals ..might take some pressure off some holdings and gives suitable time to see if additional value can be attained through strategic corporate outcomes. |
Madness - nothing but pure greed |
My thoughts too! Because, well, doing the job you're being paid to do just isn't enough?
"The Board also believes that it is in the interests of shareholders to incentivise the Investment Manager to maximise the realisation value of the investment portfolio in a timely manner. Accordingly, the Board will be engaging with the Investment Manager to put in place a revised remuneration and incentivisation agreement, which will be conditional on shareholder approval." |
As usual,the Investment Manager has to be 'incentivised' to maximise the potential of the portfolio! |
We only have the details in the RNS on the 50p dividend 6 months time. No details on the final date is possible due partly I think to the one private equity holding. CRS management will have to work hard to abstract as much money as possible. The CRS share price has dropped with the fall of the live NAV that I have set up however the live companies are starting to recover from this weeks falls and the discount possibly even wider. This is an buy and hold mostly on a few UK companies. Time will tell how well they do but be clear this is an 6-18 month investment if you decide to invest. |
What is the timeline for winding CRS up?
Thanks in advance. |
The wind up is excellent news for new investors. Selling 18 percent of a company is not hard given the time scales. Look forward to hopefully having more than 20 to 30 percent upside within about 18 months. More upside if the shares go up and the UK is in favour! |
An excellent read. A real lesson in parasitic predation.
Enough to make the simplistic PI strategy of buying into a sucessful company, and holding for the long-term to realise its potential, somewhat futile...
Thanks for posting. |
Good read about Saba from LSE, poster TalygarnTom (also see above):
hxxps://www.institutionalinvestor.com/article/b1m3lx01dnj9mq/Boaz-Weinstein-Is-Making-Bank-He-s-Not-Happy-That-You-Know-About-It
It seems odd that a percentage as low as 25% was set as the hurdle for forcing a restructure/wind up. |
Re 654:"something distasteful about a 26% shareholder being able to end it like this". Saba got their 26% largely in February-March earlier this year when a number of large shareholders sold up during the power play at HUR. HUR crashed from 20-30p after prolonged period of oil price weakness and uncertainty about the oil well was exaggerated into doubts about the repayment on HUR's CVBs.
It took an expensive Court case and recovery in oil-price to dispel fears, but perhaps some CRS holders had lost their nerve before the fight back. (It is also reasonable to wonder whether the opportunity was manufactured.)
DLAR, EQLS and HUR worked out OK, also SUH, and if they had kept them, REDD and KMR. |
www.barrons.com/articles/congress-closed-end-funds-legislation-51627657959 |
www.trustnet.com/news/13281966/the-uk-trusts-on-the-biggest-discount-or-premiums-relative-to-their-history- |
Sabe have shorted the holdings, and forced (likely) wind-up. This isn't the usual activist playbook.
They're within their rights, and can't say CRS haven't deserved it, but still leaves a sour taste when they only count for 26%. |
 Saba have been doing this for years. There is nothing new here. The continuation vote simply affords Saba control. The articles are clear; "The Articles now require the Fund to formulate proposals to reorganise, reconstruct, or wind up the Company." Again, the rewards for Saba come when they can realise their shares at NAV.
Comments from Seeking Alpha article on Saba Capital Income & Opportunities Fund
We don't have to fear the activists. They can disrupt our funds, but it is generally a short-term disruption that is usually a positive catalyst. And the long-term impact is usually neutral at worst.
The primary route of an activist is this; they come in and start accumulating a position. They communicate to the Board of the target fund that they want a tender offer. A tender offer is the usual go-to course of action. Liquidation is also a possible course of action, and so is trying to force a merger.
These are all short-term measures that don't address things that could lead to better long-term results. They would start targeting management fees and expenses if they genuinely wanted a long-term idea to help generate shareholder benefits. However, that isn't their goal at all. It is to capitalize on inefficiencies in the CEF space as quickly as possible.
From there, the Board can choose to prolong a proxy fight or just cave and enact a tender offer. Our previous article on "Here Are The Dates You Need To Know For Tender Offers" can be an excellent primer for investors that may be new to such actions. We use other Voya funds that were targeted in this onslaught to help provide references for these events.
Essentially though, a tender offer is only a short-term catalyst to prop up a fund's discount in most cases.
BRW appears to be one such case itself as it also went through tender offers. This saw the reduction of its discount but has widened back out as we generally observe.
The most recent offer went through July 19th, 2021. It was 30% of outstanding shares at 99% NAV. Thus, we saw a significant reduction in the discount for it only to collapse back afterward. |
I agree. RB seems very confident in the portfolio, although that and the actual outturn are very different things!
The vote seems to have created a bit of "you don't know what you've got till it's gone.." from some institutions so that might be a catalyst for a new venture but doing some kind of sweetheart deal to get rid of just Saba would not be a good look. |
Lol ALM. In fairness, suspect that's why they've such an extended timescale, desperately hoping FW finally comes off. But it hasn't in the past 3 years.
18% of ALM is surely completely unsellable - 1.8% would be.
CRS underperformed the FTSE over 10 years, no reason for it to carry on. But something distasteful about a 26% shareholder being able to end it like this. |
It's all a bit of a mess really. Let's hope RB & co can navigate it sensibly.
CRS doesn't have enough capital as it is so a shrunken asset base would exacerbate that. As you've noted before Speccy, it's a very lopsided/concentrated portfolio as it is. I like the strategy but without the Invesco crew to write the big cheques I can't see where the new capital will come from to create a £200m+ new vehicle.
Now if that 50p all came from ALM... |
Not that straightforward when they've also shorted the holdings, and forced (& won) the wind-up/reconstruction vote.
CRS in its current form is finished. Possible they'll attempt to carry on after distributing to Sabre in specie to cover their shorts, but "50p back by July 2022" suggests full wind-up. |
The principle here is straightforward. Saba buys shares in the trust as a discount to NAV. Currently around 20%. They then force the board to close the discount to NAV and where possible to realise their assets at NAV and to distribute the proceeds back to shareholders. They can do this through one-off distributions or increased dividends. For example, if they were to increase the dividend to 8% more income investors may look to hold the shares, increasing demand and reducing the discount. In previous cases Saba have pressed the trust in question to tender for one third of the shares at close to NAV. Reducing the number of shares can help reduce the discount to NAV. |
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