Shareholder voting advisers Glass Lewis, ISS and PIRC have sided with the board of Baillie Gifford US Growth Trust against activist hedge fund Saba Capital ahead of the trust’s annual meeting on 23 October. All three recommend that investors vote against Saba’s three resolutions and re-appoint the existing directors.
Saba filed a requisition notice in August seeking to appoint Jason Chen, Thomas H McGlade and James Waterlow to the board of the £1.1 billion trust, the third time it has requisitioned the board. The trust says the three nominees are linked to or employed by Saba and would “severely compromise” the board’s independence. Saba has lifted its holding to about 29.9 per cent, just below the level that would oblige it to make a takeover offer, and New York hedge fund Sessa Capital, which has raised its stake to 7.7 per cent, is believed to support Saba’s motion.
Chair Tom Burnet has questioned Saba’s promise of a full cash exit at or near net asset value if its nominees win, saying the trust lacks sufficient legal reserves to fund it and that Saba has not explained who would bear the costs. Saba founder Boaz Weinstein says his activism has generated more than £600 million for shareholders across the trusts it has targeted. The board points to performance: in the year to 31 May 2026 the share price returned 44.5 per cent and net asset value 31 per cent, against 29.8 per cent for the S&P 500. The Association of Investment Companies says the trust has returned 282 per cent since its launch in March 2018, compared with 257 per cent for US equities.
Burnet said the advisers shared the board’s view that Saba’s proposals fall short of governance standards and signal an attempt to take control, and he urged retail investors to vote, noting that private investors hold more than half the shares. The proxy voting deadline is 1pm on 21 October, but some platform deadlines fall as early as 14 October and major platforms close from 19 October. Burnet has also written to Scottish Secretary Douglas Alexander and Economic Secretary Lucy Rigby, arguing that trusts are being targeted in ways that “existing rules were not designed to handle” and that a determined minority could seize a company most shareholders want to keep.
The Department for Business and Trade said shareholders should use their votes and pointed to planned changes to the shareholding framework, including automatic voting rights for all investors, adding that it would work with the Financial Conduct Authority to keep trusts well run. The FCA has proposed listing rule changes that would stop a substantial shareholder that is also the investment manager from voting on material changes to investment policy. Simon Walls, the regulator’s interim executive director of markets, said voting rights fall under company law overseen by the department rather than the FCA.
