Alexander Darwall has upped his stake in his European Opportunities (EOT ) trust to more than 7%, keeping him well ahead of activist investor Saba Capital.

A stock market filing confirmed Darwall, chief investment officer of Devon Equity Management, increased his share in the £575m fund to 7.83% – a nearly 1% jump from his previous position of 6.84%.

He holds nearly 4.9 million shares, valued at around £40.3m based on yesterday’s closing share price of 823p.

Another notable addition to the EOT share register is that of Rufus Darwall: a separate stock market announcement confirmed Rufus has become the sixth-largest shareholder in EOT, with a stake of 3.14%.

A request for clarity on the relationship between Alexander and Rufus, or the reason why the stake had been taken, was declined. The fund said it was ‘not in a position to comment on the private affairs of individual shareholders, nor speak on their behalf’.

Alexander Darwall’s additional investment solidifies his position as third-largest shareholder on the register. The latter is awash with activist investors, including the largest shareholder, 1607 Capital Partners (at 13.6%), and the fourth-largest, City of London Investment Management (5.6%).

However, the discount player likely to pique the most interest is Saba Capital, which still holds a 4.4% stake, making it the fifth-largest shareholder, according to the latest Refinitiv data. 

The New York-based hedge fund, which made European Opportunities an early target, unsuccessfully fought for a 50% tender and voted against European Opportunities’ continuation in 2023. It slashed its holding from 10% to 3.9% after failing to get its own way.

Instead, European Opportunities delivered an oversubscribed £221m tender offer in January last year and has continued to buy back shares since. 

The chair of the trust and former Schroder AsiaPacific fund manager, Matthew Dobbs, said in September that Alexander Darwall was under ‘close review’ following a prolonged period of underperformance and that the board was not ‘complacent’.

Over the past five years, the fund has seen its net asset value increase just 6.6% and its shares slip 0.6% on a total return basis, far below the 38.1% return from the MSCI Europe ex-UK index.

The fund still trades at a double-digit discount of 12% and Saba still sits high up on the share register, but Darwall has edged further ahead with his latest move.

Devon Equity Management declined to say whether it was a defensive move against Saba given the requisition of seven trusts just before Christmas that has sent shockwaves through the investment trust industry.

Saba boss, Boaz Weinstein, renewed his criticism of European Opportunities in an aside during an excoriating webinar this week. 

‘We said if we lose… these things are going to be at yawning discounts a year later,’ he said, pointing to how EOT’s discount had widened back out from around 7% in late 2023 after the continuation vote.

‘The manager has built a moat that makes it very hard for us to come back again,’ he added. 

Saba has targeted Baillie Gifford US Growth (USA ), Herald (HRI ), Keystone Positive Change (KPC ), CQS Natural Resources Growth & Income (CYN ), Edinburgh Worldwide (EWI ), Henderson Opportunities (HOT ), and European Smaller Companies (ESCT ), where it said the boards have overseen extended periods of poor performance and wide discounts.

Retail investors are being courted by the respective trusts to vote for the future of the trust and reject Saba’s takeover plans, which the investment companies say will result in higher fees and a change in investment strategy.