Saba action – your trusts need you

Read our summary report here.

Saba Capital Management has requisitioned general meetings for seven investment trusts proposing to replace their current boards of directors. The London market needs permanent capital vehicles and the impact of what is being proposed has much broader implications for the London market. We encourage all investors to vote at the upcoming general meetings and are looking to provide them with as much information as we can to make an informed choice.

Shareholders of seven UK-listed investment trusts face a crucial vote during the upcoming general meetings. The trusts are Baillie Gifford US Growth Trust (USA), CQS Natural Resources Growth & Income (CYN), Edinburgh Worldwide (EWI), The European Smaller Companies Trust (ESCT), Keystone Positive Change Investment Trust (KPC), Henderson Opportunities Trust (HOT) and Herald Investment Trust (HRI). Their shareholders need to either approve or reject the agenda pursued by US hedge fund Saba Capital Management, which has built sizeable stakes of c 20–30% in these trusts in recent months, mostly by using a leveraged strategy via total return swaps. We recommend that investors carefully consider Saba’s radical proposals to oust the existing boards, replace them with new directors proposed by Saba and take over the management of the assets. Saba will likely favour a plain opportunistic arbitrage strategy to exploit the discounts to NAV among UK-listed investment trusts (by replicating the strategy of Saba Closed-End Funds ETF, ticker: CEFS), coupled with growing its own assets under management and fee income, over providing shareholders with a truly differentiated value proposition tailored to each of these trusts.

Find out more below:

• • The Association of Investment Companies How to vote your shares, How to attend an AGM and AIC raises regulatory concerns with FCA about Saba proposals

• • Herald Investment Trust (HRI) General meeting vote before midday on 20 January 2025
  • Baillie Gifford USA (USA) General meeting vote before midday on 30 January 2025 and Edison research
  • Keystone Positive Change Investment Trust (KPC) General meeting vote  midday on 30 January 2025
  • Henderson European Opportunities Trust (HOT) General meeting vote before 10am on 31 January 2025
  • CQS Natural Resources Growth and Income (CYN) General meeting vote before 11am on 31 January 2025
  • European Smaller Companies Trust (ESCT) General meeting vote before 12.30pm on 3 February 2025
  • Edinburgh Worldwide Investment Trust (EDIN) General meeting vote TBC