The £1.2billion Herald Investment Trust will tomorrow be the first of seven trusts targeted by US raider Saba Capital to face a vote on whether to oust its entire board and replace them with the hedge fund’s nominees.
The other trusts in the crosshairs are Baillie Gifford US Growth, Edinburgh Worldwide, European Smaller Companies, Keystone Positive Change, CQS Natural Resources and Henderson Opportunities.
Fears are mounting in the industry that a low turnout among private investors who own shares in the trusts will hand Saba victory.
While Saba has stakes in each firm ranging from 19 per cent to 29 per cent, the trusts also have large numbers of retail investors whose votes will prove crucial in deciding the outcome.
Swooping: Saba, founded by Boaz Weinstein (pictured with ex-wife Tali Farhadian), is pushing to oust the boards at seven UK investment trusts
The US firm needs to win at least 50 per cent support from voting shareholders to succeed. As a result, it will win if other investors do not actively vote against its proposals.
This is how investors will be able to vote on Saba’s plans at the upcoming meetings.
Proxy voting
Investors do not have to attend the meetings in person and can instead use proxy votes, where someone else votes on their behalf.
But they must ensure they fill out the forms required for proxy voting before a deadline ahead of the vote itself.
For some of the trusts, the notice period deadline can fall as much as a week before the meeting, so investors trying to vote by proxy should check with the trusts directly and monitor any announcements.
For example, Edinburgh Worldwide Investment Trust announced yesterday that shareholders must submit their voting intentions by 11.45am on February 12 at the latest to be counted.
Voting through investment platforms
Many investors hold their shares in the trusts through investment platforms which use nominee accounts to allow them to cast votes collectively or vote individually.
Large platforms such as AJ Bell You Invest, Hargreaves Lansdown and Interactive Investor allow investors to vote with shares held through their accounts at no cost, according to a guide from industry body the Association of Investment Companies (AIC).
However, some platforms have deadlines for submitting voting instructions that can be even earlier than the deadlines of the trusts themselves, meaning investors must submit their voting instructions to the platforms as soon as possible.
Platforms have been seeking to get individual investors to vote on the Saba Capital proposals, which can be done through their websites.
Shareholders holding any of the trusts affected should look out for correspondence or go to the platform websites to find out how to vote.
Those who hold shares through investment platforms should check their emails, their inbox on the platform, or contact the platform directly for more information.
Shareholders should note that not all platforms automatically inform investors of upcoming votes in companies they are invested in, so some users may need to opt in to receive information and instructions on how to vote.
It is also important that investors who hold shares across different accounts, such as in ISAs or a self-invested personal pension (SIPP), make sure all of their shares will be used to vote by the platform through which they are held.
Attending the meetings in person
Investment trust shareholders are entitled to attend meetings and vote on what happens to the companies that they hold a stake in.
However, it is important to note that attending in person does not mean a shareholder can miss the deadline to submit their voting instructions ahead of the meeting date.
Those who hold share certificates should be contacted by investment trusts directly to notify them of events and votes, and explain what to do and how to attend a meeting.
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