Saba Capital Management has generated a 42% net return from its UK investment trust-focused hedge fund in the first nine months of 2026, following a series of successful activist campaigns targeting discounted London-listed funds, according to a report by Bloomberg.

The Saba Capital CEF Special Opportunities Fund II returned approximately 42% after fees through 30 September, compared with gains of 4.6% in 2025 and 16.4% in 2024, according to people familiar with the figures.

The performance has reportedly prompted Weinstein to consider reopening the fund to new investors for the first time in more than two years. A representative for Saba declined to comment.

Returns were driven by restructurings at several UK investment trusts, including technology-focused Herald Investment Trust and a vehicle managed by Terry Smith's Fundsmith, where changes supported or advocated by Saba allowed shareholders to exit their holdings at more favourable valuations.

Saba's strategy involves acquiring stakes in investment trusts trading at substantial discounts to their net asset values and pushing for measures such as share buybacks, tender offers and structural changes to narrow those discounts.

The fund, which follows a market-neutral investment approach, managed $244m at the end of 2024 before returning some capital to investors.

Saba's broader exposure to UK investment trusts has grown substantially. Weinstein recently told the Sunday Times that the firm holds more than £2bn in exposure, including leverage, across as many as 50 London-listed companies.

The activist campaign began in December 2024, when Saba sought to replace directors at seven UK investment trusts with its own nominees. Although those initial boardroom challenges were unsuccessful, several targeted funds subsequently introduced changes consistent with Saba's demands.

Weinstein, a former Deutsche Bank credit trading executive who founded Saba in 2009, has pursued similar strategies in the US closed-end fund market, targeting vehicles managed by BlackRock and other major asset managers.

Saba currently manages approximately $6.8bn across its investment strategies.

The hedge fund's latest UK campaign targets Baillie Gifford US Growth Trust, where Saba is seeking to appoint new board members. The trust's portfolio includes a substantial holding in artificial intelligence company Anthropic.

The strong returns highlight the potential profitability of activist strategies targeting investment trust discounts, as pressure from shareholders pushes fund boards to consider measures aimed at improving valuations and returning capital to investors.