B Gifford toasts double victory over hedge fund Saba

Baillie Gifford

Edinburgh-based investment group Baillie Gifford has welcomed the overwhelming shareholder votes at two of its investment trusts to defeat New York activist hedge fund Saba Capital Management.

Baillie Gifford, manager of the Baillie Gifford US Growth Trust and Keystone Positive Change Investment Trust, announced the “decisive rejection” of Saba Capital Management’s proposals “to overhaul the existing boards, mandates, management, and fees.”

The trusts are among the seven investment trust companies attacked by Saba Capital “to convene general meetings of shareholders to … vote on resolutions to remove the Trusts’ existing directors and appoint highly qualified directors to replace them.”

Three of the seven funds are managed by Edinburgh-based Baillie Gifford, which has assets under management of £217 billion.

“In a display of shareholder democracy, 78% of Baillie Gifford US Growth Trust and 72% of Positive Change Investment Trust shareholders exercised their right to vote,” said Baillie Gifford.

“Almost all non-Saba shareholders (98.5% for US Growth Trust and 99.2% for Keystone Positive Change) voted against Saba’s proposals.”

James Budden, Head of Global Marketing at Baillie Gifford, said: “Today’s votes highlight the importance of shareholder democracy and represent a strong repudiation of Saba’s proposals by a clear majority of shareholders.

“Shareholder engagement is crucial to the health of the investment trust sector.  Hopefully the quantum of the vote cast today is a sign that such participation can be more common in the future.

“The UK investment trust sector is far from cosy, sleepy and complacent. It remains both dynamic and robust.

“It is constantly busy, with capital returns and regular buybacks, mergers and changes in management. Boards are committed to the best interests of shareholders and the votes today are a clear affirmation of this governance at work.”

Association of Investment Companies (AIC) CEO Richard Stone said: “It’s encouraging to see so many shareholders of Baillie Gifford US Growth and Keystone Positive Change come out and vote on this critical issue.

“The impressive turnout of retail investors demonstrates what can be achieved when shareholders are informed, enabled and motivated to have a say on their trust.

“Our campaign ‘My share, my vote’ aims to change the Companies Act so everyone receives information on their company and can vote.

“There’s still time to vote your Edinburgh Worldwide shares so take action and vote now.”