Aberdeen inks deal with Saba to manage Herald Investment Trust

(Sharecast News) - Aberdeen Group said on Thursday that its Aberdeen Investments business had reached an agreement to become investment manager of Herald Investment Trust, as part of a wider arrangement with Herald Investment Management and Saba Capital Management. The FTSE 250 company said the proposal was intended to bring Herald Investment Management's funds under Aberdeen's management, including the Herald Worldwide Technology Fund.

The combined assets under management are about £1.6bn.

Aberdeen said eight Herald staff, including lead manager Katie Potts, were expected to join the group, bringing experience across technology, smaller companies and media investing.

The team was expected to relocate to Aberdeen's London office and gain access to the group's distribution and marketing capabilities.

The proposed appointment followed a separate announcement by Herald Investment Trust of a tender offer for up to 66% of its issued share capital.

The offer was intended to allow Saba, Herald's largest shareholder, and other investors to exit at close to net asset value or remain invested in the trust.

Saba had given an irrevocable undertaking to tender its full holding in Herald.

Subject to the completion of the tender process, necessary approvals and finalisation of transitional arrangements, Aberdeen said the change of investment manager was expected to take effect in the third quarter of 2026.

As part of the agreement, Saba had signed a three-year standstill agreement with Herald and Aberdeen Investments, under which it had committed not to vote against the Herald board's recommendations at general meetings.

Aberdeen Investments and Saba had also reached an agreement relating to up to eight further investment trusts in Aberdeen's range, with combined assets under management of about £12.5bn.

Those trusts would have the option to participate in a similar standstill arrangement if their independent boards choose to do so.

Aberdeen chief executive Jason Windsor said the Herald team had "a long track record of backing early-stage technology companies, and driving material long term growth from those investments".

"As the fifth largest manager of closed-end funds globally, and as a leading small cap manager, we are delighted to welcome Katie Potts and her team to Aberdeen," he said.

"Completion of this transaction will further grow our franchise and demonstrate our innovation and commitment to the sector."

Christian Pittard, head of closed end funds and managing director of corporate finance at Aberdeen, said the transaction would preserve "one of Britain's best known investment trusts" and allow the Herald team to continue its strategy within Aberdeen's closed-end funds business.

"We would also like to thank Saba, who deserves special mention for working constructively and creatively to end the impasse," he said.

"Saba's collaboration and determination to find a path forward that benefited all shareholders ultimately made it possible to preserve this trust and, together, deliver an outcome that is positive for everyone."

Potts, founder of Herald Investment Trust, said the trust's investment strategy would remain unchanged under Aberdeen.

"Herald has delivered a clear and successful investment strategy since 1994, and this disciplined approach will remain unchanged with Aberdeen, who I look forward to joining," she said.

"Our focus remains firmly on the technology and communications sectors, which continue to benefit from exceptional innovation and strong long-term growth prospects."

Aberdeen said it currently manages about £19.8bn in closed-end funds, making it the fifth-largest manager of closed-end funds globally.

As at 30 April, Herald Investment Trust had assets under management of about £1.5bn, while the Herald Worldwide Technology Fund had about £130m.

At 0935 BST, shares in Aberdeen Group were up 1.21% at 216.9p.

Reporting by Josh White for Sharecast.com.

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