Activist Investor Board Push
Saba Capital Seeks Board Seats at Baillie Gifford US Growth Trust
Key Points
Jason Chen was installed on the Impax Environmental Markets PLC board by Saba in June, illustrating the activist fund's strategy of placing allies on multiple London-listed investment-trust boards.
Saba blocked the proposed merger between Edinburgh Worldwide Investment Trust and Baillie Gifford US Growth Trust in December last year.
Saba gained control of Edinburgh Worldwide Investment Trust earlier this year, continuing its campaign to shake up Baillie Gifford-managed trusts.
Saba’s campaign has targeted other Baillie Gifford-managed funds as part of its broader reshaping effort, including Herald Investment Trust, European Smaller Companies Trust, Henderson Opportunities Trust, Keystone Positive Change Investment Trust, and CQS Natural Resources Growth & Income.
Baillie Gifford US Growth Trust was launched in 2018 to back US growth companies with a long-term capital-growth objective, and it originally held around 90 holdings with a typical range of 30–50 holdings and a maximum 10% exposure to any single holding.
Saba Capital Management, a New York hedge fund that owns about 29% of Baillie Gifford US Growth Trust, is pushing to overhaul the board by nominating three new directors—Jason Chen, Thomas H. McGlade, and James Waterlow—for election at the upcoming annual meeting FT Adviser. The £908 million trust, launched in 2018 to invest in US growth stocks, is facing its most serious governance challenge yet as Investing.com reports that Saba is also urging the trust to provide shareholders with a full cash exit option if the new directors win seats.
Saba's Pattern of Board Takeovers at Baillie Gifford
This push marks Saba's latest move in a broader campaign to shake up Baillie Gifford-managed investment trusts. Earlier this year, the activist fund won control of Edinburgh Worldwide Investment Trust after blocking a proposed merger between EWIT and the US Growth Trust Street Insider. Saba has also targeted Herald Investment Trust, European Smaller Companies Trust, and several others in the same family of funds.
One of the nominees, Jason Chen, was already installed on the board of Impax Environmental Markets PLC by Saba in June FT Adviser. This shows Saba's strategy of placing trusted allies on multiple London-listed investment-trust boards to advance its agenda across the sector.
Why Saba Wants a Cash Exit for Shareholders
Investing.com reports that Saba is encouraging the three nominated directors to offer shareholders a full liquidity event—essentially a way to cash out of the trust entirely. This reflects growing frustration with the trust's performance and structure. The activist fund believes shareholders would benefit from an exit rather than staying locked in the fund long-term.
The trust, which focuses on capital growth in US stocks with no dividend payouts, holds a portfolio that typically ranges from 30 to 50 holdings with a maximum 10% exposure to any single company FT Adviser. Saba's push for liquidity signals concern that the current strategy isn't delivering enough value.
Baillie Gifford Urges Shareholders to Wait for More Details
The trust's board has publicly asked shareholders to take no action yet and to wait for further announcements as the campaign unfolds Investing.com. This defensive stance is typical when activist investors strike—management buys time to mount a response and make its case to shareholders before the vote.
Morningstar confirmed that Saba requested resolutions at the upcoming annual general meeting, which Morningstar reports is scheduled for September. The timing gives Baillie Gifford a window to address shareholder concerns and potentially negotiate with Saba behind the scenes.
A Bigger Shake-Up in UK Investment Trusts
Saba's campaign reflects growing pressure on UK investment trust managers to deliver better returns and give shareholders more say. Saba has targeted at least five other Baillie Gifford-managed funds in recent months, signaling that this activism isn't limited to just one trust. The fund's success at Edinburgh Worldwide earlier this year emboldened it to push harder elsewhere.
For Baillie Gifford US Growth Trust shareholders, the coming weeks will determine whether the board holds firm or yields to Saba's demands. At stake is both the fund's direction and a broader message about activist investor power in London's listed investment-trust market.
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