The Saba “raid” on 7 UK listed investment trusts

Background story

Investors in 7 UK investment trusts targeted by Saba Capital, an activist hedge fund, need to decide whether to support or oppose proposals that could significantly change the trusts’ management and investment strategies. Saba holds between 19% and 29% of each trust and is seeking to replace current directors with its own nominees. The hedge fund’s plan includes potentially appointing itself as the new investment manager and exploring strategies such as mergers, share buybacks, and tender offers.

The affected trusts are:

• Baillie Gifford US Growth Trust (USA / GB00BDFGHW41)

• CQS Natural Resources Growth & Income (CYN / GB0000353929)

• Edinburgh Worldwide Investment Trust (EWI / GB00BHSRZC82)

• European Smaller Companies Trust (ESCT / GB00BMCF8689)

• Henderson Opportunities Trust (HOT / GB00BSHRGN41)

• Herald Investment Trust (HRI / GB0004228648)

• Keystone Positive Change Investment Trust (KPC / GB00BK96BB68)

Saba argues that the boards of these trusts have failed to address underperformance and large discounts to net asset value (NAV), while the trusts have rejected Saba’s plans, calling them opportunistic and lacking transparency.

How does voting work?

Saba has put forward two resolutions at each of the trusts’ upcoming Extraordinary General Meetings (EGMs): one to remove the current directors and another to appoint new directors of Saba’s choosing. These resolutions require a simple majority (more than 50%) of the votes cast to pass.

Saba already holds a significant stake in each trust (19%-29%), and will vote in favor of its proposals. For Saba not to succeed, other investors would need to cast enough votes against the resolutions to block the changes.

For instance, if a majority of shareholders do not vote, Saba will likely win.

Shareholder meetings to vote on Saba’s proposals are scheduled as follows:

• Herald Investment Trust (HRI): 22-Jan-2025 *** Saba defeated: 65% of votes against / 35% for ***

• Baillie Gifford US Growth Trust (USA): 03-Feb-2025

• Keystone Positive Change Investment Trust (KPC): 03-Feb-2025

• CQS Natural Resources Growth & Income (CYN): 04-Feb-2025

• Henderson Opportunities Trust (HOT): 04-Feb-2025

• European Smaller Companies Trust (ESCT): 05-Feb-2025

• Edinburgh Worldwide Investment Trust (EWI): 14-Feb-2025

Investors must review the resolutions for each fund and vote accordingly, as the outcome could significantly affect the future of these trusts. Voting is crucial, as it provides investors with a chance to influence the governance and consequently the performance of their investments.

To help you make up your mind:

Baillie Gifford US Growth Trust (USA)

Here you can find a summary of the trust main features with historical returns and fees:

https://pickafund.com/search-investment-funds/375393/usa

(Click on the trust name to see all its parameters including discount / premium to NAV. Compare trust performance to a benchmark of your choice by selecting from the yellow drop-down)

For a more detailed analysis of how the trust has performed compared to its category peers:

https://pickafund.com/compare-fund-to-peers/GB00BDFGHW41/baillie-gifford-us-growth

RELATED NEWS

CQS Natural Resources Growth & Income (CYN)

Here you can find a summary of the trust main features with historical returns and fees:

https://pickafund.com/search-investment-funds/375379/cyn

(Click on the trust name to see all its parameters including discount / premium to NAV. Compare trust performance to a benchmark of your choice by selecting from the yellow drop-down)

For a more detailed analysis of how the trust has performed compared to its category peers:

https://pickafund.com/compare-fund-to-peers/GB0000353929/cqs-natural-resources-gandi-ord

Edinburgh Worldwide Investment Trust (EWI)

Here you can find a summary of the trust main features with historical returns and fees:

https://pickafund.com/search-investment-funds/375382/ewi

(Click on the trust name to see all its parameters including discount / premium to NAV. Compare trust performance to a benchmark of your choice by selecting from the yellow drop-down)

For a more detailed analysis of how the trust has performed compared to its category peers:

https://pickafund.com/compare-fund-to-peers/GB00BHSRZC82/edinburgh-worldwide

RELATED NEWS

European Smaller Companies Trust (ESCT)

Here you can find a summary of the trust main features with historical returns and fees:

https://pickafund.com/search-investment-funds/375387/esct

(Click on the trust name to see all its parameters including discount / premium to NAV. Compare trust performance to a benchmark of your choice by selecting from the yellow drop-down)

For a more detailed analysis of how the trust has performed compared to its category peers:

https://pickafund.com/compare-fund-to-peers/GB00BMCF8689/the-european-smaller-companies-trust-plc

Henderson Opportunities Trust (HOT)

Here you can find a summary of the trust main features with historical returns and fees:

https://pickafund.com/search-investment-funds/375385/hot

(Click on the trust name to see all its parameters including discount / premium to NAV. Compare trust performance to a benchmark of your choice by selecting from the yellow drop-down)

For a more detailed analysis of how the trust has performed compared to its category peers:

https://pickafund.com/compare-fund-to-peers/GB00BSHRGN41/henderson-opportunities-trust

RELATED NEWS

Herald Investment Trust (HRI)

Here you can find a summary of the trust main features with historical returns and fees:

https://pickafund.com/search-investment-funds/375390/hri

(Click on the trust name to see all its parameters including discount / premium to NAV. Compare trust performance to a benchmark of your choice by selecting from the yellow drop-down)

For a more detailed analysis of how the trust has performed compared to its category peers:

https://pickafund.com/compare-fund-to-peers/GB0004228648/herald-investment-trust

RELATED NEWS