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Saba escalates fight to wind up Gore Street Energy Storage Fund
The activist says Gore Street’s group NAV fell about 15% in the latest quarter and that the shares trade at roughly a 35% discount to the reduced NAV.
Saba Capital has stepped up its campaign against Gore Street Energy Storage Fund, urging shareholders to back proposals to wind up the 244 million pound investment trust and to press for more transparency about the recent sale of two Irish battery storage assets, according to Hedgeweek citing a QuotedData report.
In an open letter ahead of the fund’s 16 September annual general meeting, the US activist hedge fund, which owns about 17% of the trust, questioned how the Kilmarnock and Mucklagh projects were valued and sold after they were disposed of to GS EU, a fund managed by Gore Street Investment Management.
Saba asked the board to disclose the transaction price and details of the auction process run by adviser Alexa Capital, arguing shareholders should not rely on assurances that the sale price was at least equal to the assets’ most recently published net asset values. The activist also said the reported NAV comparison is less meaningful because Gore Street has been reducing carrying values across its portfolio.
Saba said it approached the board privately twice this year without a satisfactory response and described its prior proposals, including a search for a new investment manager. It also challenged Gore Street’s March recovery plan, which envisaged selling assets and reinvesting in existing battery storage projects to target a 7 pence per share dividend, and argued dividend coverage was just 0.28 times by operational earnings, while the trust’s NAV has declined 27% over the past year and shares trade about 35% below that reduced NAV.