By a margin of roughly 71% of the votes, Saba Capital has successfully appointed a new set of directors to the board of Impax Environmental Markets (IEM) during a requisitioned general meeting yesterday.
The saga between these two has been fraught with tensions since the hedge fund entered the scene last year. Earlier this year, Saba Capital ended up with more than 31% of the company’s shares in May, which it used to push to replace the incumbent board with Caroline Bault, Steven Grey, Jason Chen, and Aaron Morris.
Commenting before the AGM and RGM, Glen Suarez (now former) chair of IEM, said: “By January 2026, Saba’s stake in the company had increased to over 20% and it became apparent that its objectives were fundamentally incompatible with the vast majority of IEM’s other shareholders.
“And here we are today, with the outcome unfolding exactly as the board anticipated.
“Saba, a single minority shareholder, has effectively taken control of the company due to the peculiarities of the UK regulatory regime and UK company law,” Suarez said.
However, Suarez reflected positively on the successful exit tender offer earlier this year, when roughly 80.5% of non-Saba shares were tendered at close to net asset value (NAV).
“We are satisfied that we gave all shareholders the option of getting out at close to NAV,” Suarez concluded.
See also: ‘There will be no celebration’ as Impax Environmental Markets successfully passes tender offer
Commenting on the decision, Boaz Weinstein, founder and chief investment officer at Saba, said: “IEM shareholders delivered a resounding rejection of the status quo – not once, but twice.
“After 80.5% of non-Saba shareholders chose to exit in April, 71% of voting shares today chose to replace the incumbent directors with a new board. The message is simple: the underperformance cannot go on.”
The hedge fund took issue with Suarez’s claim they represented a single minority shareholder. Weinstein argued that Saba represented “millions of ordinary savers” and bought their shares from “the very IEM shareholders the incumbents claim to champion”.
These shareholders were compelled to sell on the back of what Weinstein called “disastrous performance”.
Indeed, according to data from FE fundinfo, the trust has underperformed its benchmark, MSCI ACWI, by a wide margin over the past five years, by almost 70 percentage points.
However, former chair Suarez argued that since the continuation vote last year, “performance has improved considerably, with the board’s recent initiatives beginning to yield tangible results”. Indeed, over the past year, IEM had been much closer to the MSCI ACWI, underperforming by less than a percentage point.
Initial reactions to the news were mixed.
Richard Stone, chief executive of the Association of Investment Companies (AIC), described the news as “disappointing”.
“Just a year ago, the overwhelming majority of shareholders voted for the continuation of this company and its investment strategy.
“It’s disappointing that directors nominated by Saba, a single minority shareholder, have been appointed to the board, effectively taking control of this company.”
Meanwhile, Ben Yearsley, director at Fairview Investing, said: “I don’t have the same feelings toward Saba that many others seem to.
“You can argue about their tactics and approach, but with some of their target’s performance has been dire and the trusts have needed a shake-up.”
See also: ‘Calls to action have lacked clear proposals’: FCA defends its position on trusts
The future for IEM?
Saba’s Weinstein said the next step for IEM was to appoint a new manager.
“We urge the new directors to act immediately upon appointment to serve notice to terminate Impax’s management contract and begin the search for a new manager.
“Shareholders finally have a board that will put their interests first – now, they need a manager committed to doing the same.”
Matthee Read, senior analyst at IEM, said Saba’s chosen board members need to clearly explain what they intend for the company and how they ensure all the remaining shareholders are treated fairly.
“IEM still has a specialist environmental mandate with shareholders who invested on that basis.
“The fact that many shareholders chose to exit does not remove the responsibilities owed to those who stayed,” Read said.
The QuotedData team called on Saba to conduct a transparent independent review of the company’s future, instead of “validating a plan already favoured by Saba”.
“This next step will show whether Saba’s chosen directors are really as independent as it has claimed they will be,” the analyst said.
Moving forward, the AIC said it was pushing for changes to address activism that benefits one shareholder and to encourage the government to put in place legislation to ensure all shareholders get the information and voting rights they need.
“This is the second time a minority shareholder has been able to set the direction of an investment trust against the wishes of most other investors.
“We are expecting the FCA to announce a consultation on changes to the Listing Rules shortly,” Stone said.
See also: Saba Capital to seize control of Edinburgh Worldwide