Aberdeen, the fund manager formerly known as abrdn, has brokered a unique deal with activist investor Saba Capital Management, led by Boaz Weinstein. This agreement effectively acts as a 'Saba repellent' for Herald Investment Trust and eight other trusts managed by Aberdeen. Saba, which had successfully lobbied Herald IT to launch a tender offer, agreed to a three-year standstill, preventing further activist actions.

What makes this deal unusual is that Aberdeen is paying Saba an undisclosed sum not just to protect Herald IT, but also eight other investment trusts. This multi-trust agreement aims to "create a period of stability" for shareholders, with the fee paid to Saba going to investors in its funds. This is reportedly the first such agreement between an activist and a UK-based fund manager, though Saba previously made a similar deal with BlackRock covering 50 funds.

Aberdeen will bear the full cost of this 'repellent', capitalizing the fee as an intangible asset. This contrasts with Herald IT's previous manager, Herald Investment Management, which is being paid £1.75mn by the trust for its wind-down costs. Saba, by tendering its stake in Herald IT and taking an in-specie distribution, avoids this cost and benefits from the multi-trust protection fee.