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Saba proposals bring proxy voters out in record numbers
The response to Saba’s proposals appears to be marking a turning point for shareholder voting, with investment platforms reporting a surge in shareholders exercising their rights to vote remotely.
Herald’s defeat of the Saba proposals saw record numbers of Hargreaves Lansdown (HL) customers vote through its platform, and data released today suggests that the upcoming votes are witnessing a similar trend.
Half of HL customers that are shareholders in Henderson Opportunities Trust have voted on the proposals – more than the 41% equivalent for the Herald vote. 54% of HL shareholders in the European Smaller Companies Trust have exercised their votes through HL’s platform.
“We are pleased to see such high engagement and record high voting levels following our campaign to encourage investors to express their right to vote,” says Emma Wall, head of platform investments at Hargreaves Lansdown. “Shareholder rights are one of the key benefits of the investment trust structure and that is why we want to make it as easy as possible for HL clients to vote, whatever their choice, and why we have proactively informed impacted shareholders.”
As of 2 February the fund with the lowest proportion of HL shareholders that have voted through the platform is Edinburgh Worldwide Investment Trust, at 28%. However, Edinburgh is on a separate schedule from the other trusts, with the general meeting scheduled for 14 February, and voting open via HL’s platform up until 10 February (voting through the platform for the other trusts has now closed).
Besides Edinburgh, the Baillie Gifford US Growth Fund sees the lowest proportion of HL users that have exercised their vote, at 40%.
When will we know the results of the voting?
The requisitioned general meetings at Baillie Gifford US Growth (LON:USA) and Keystone Positive Change (LON:KPC) are just getting underway.
It could be a few hours until we know the results, though. Stay tuned through the afternoon as we bring you live updates and reaction.
AIC: Saba proposals would radically change investment trusts
In a statement to MoneyWeek, the Association of Investment Companies (AIC) said that “these upcoming votes couldn’t be more important for the shareholders of the targeted trusts.
“The Saba proposals would radically change these investment trusts by replacing the board and changing the mandate, manager and fees. Shareholders need to look carefully at the proposals, consider the response from the seven boards and vote their shares.
“Saba’s proposals would initially replace the current, independent boards of the seven trusts with just two new directors: Saba’s own representative and another director nominated by the firm,” says Richard Stone, CEO of the AIC. “Two directors would be an unusually small board for an investment trust given the functions the board performs, and having both directors so closely aligned to one major shareholder inevitably raises questions.”
The AIC urges shareholders in the trust to consider whether they are comfortable with the idea of the trusts having such a small board, with such close ties to a single entity.
“Although Saba suggests it will appoint further independent directors at a later stage, shareholders need to think through the implications of these two new directors taking control over the strategy, manager and mandate – fundamentally changing the risk and return profile of the trust,” its statement said.
When are investment trust general meetings taking place?
The timetable for general meetings to vote on Saba’s proposals is below. As you can see, the first meetings – those of Baillie Gifford US Growth and Keystone Positive Change are taking place today. We’ll bring you live coverage of the results of these meetings as they happen.
| Investment trust | General meeting date |
|---|---|
| Baillie Gifford US Growth | 3 February 2025 – 12 noon |
| CQS Natural Resources Growth & Income | 4 February 2025 – 11am |
| Edinburgh Worldwide | 14 February 2025 –11.45am |
| The European Smaller Companies Trust | 5 February 2025 – 12.30pm |
| Henderson Opportunities Trust | 4 February 2025 – 10 am |
| Keystone Positive Change | 3 February 2025 – 12 noon |
Source: Association of Investment Companies
The Saba saga so far
On 19 December, Saba announced that, as a significant shareholder in the trusts in question, it had requisitioned general meetings at seven UK investment trusts in order to address what it called “underperformance, persistent trading discounts and disengaged management teams”.
Its ‘Mind the Gap’ campaign sought to address steep trading discounts to net asset value (NAV) at the seven trusts by displacing their boards, and replacing them with new boards that, while including independent members, would include at least one of the hedge fund’s own employees as directors.
The proposals have attracted widespread criticism from the boards of the trusts themselves as well as investment trust industry experts. Saba has responded by claiming it is acting in shareholders’ best interests.
Saba’s campaign stumbled at the first hurdle when Herald Investment Trust shareholders voted against its proposals, but five more general meetings are taking place this week.
Good morning, and welcome to our live blog following a crucial week for the UK’s investment trust industry.
Over the next three days, five trusts will vote on proposals from New York hedge fund Saba Capital seeking to replace their current managers with its own appointees.
Follow this live blog for all the latest updates, reaction and analysis as shareholders of the investment trusts vote on Saba’s proposals.
