Saba loses fight against two more investment trusts

Shareholders in both Baillie Gifford US Growth (USA) and Keystone Positive Change (KPC) have voted down Saba Capital's proposals to oust the current board and take a new approach, meaning the US activist has lost the first three of its seven battles to oust investment trust boards.

Some 65.6 per cent of Baillie Gifford US Growth votes cast were against Saba's proposals, in a poll that represented around 78.4 per cent of the trust's voting rights. As such, some 98.5 per cent of the votes cast were against the resolutions if those voted by Saba are discounted, marking a level of support similar to that seen with the Herald (HRI) vote held in late January.

Keystone Positive Change, a poor performer that proposed to offer investors an exit before Saba's intervention late last year, saw around 60 per cent of the votes cast go against Saba. Just 0.8 per cent of non-Saba votes were made in favour of the proposals.

It appears that institutional investors other than Saba have been voting against the proposals while retail investors, often seen as unlikely to vote, have been mobilised to do so in this case. AJ Bell said, for example, that 60 per cent of the US shares held on its platform had been voted on Saba's proposals.

However, those trusts that win their votes still face an uncertain future, given that they still count Saba as a substantial shareholder.

Baillie Gifford US Growth chair Tom Burnet said: "We would like to thank shareholders for their support at this important moment for the company. We are delighted, in particular, by the number of retail shareholders who have voted and played a key role in this positive outcome and encourage them to continue to make their voices heard."

Keystone Positive Change chair Karen Brade said the KPC board's focus would return to the proposal of offering investors an uncapped cash exit or rolling over into a different fund.

Three more votes, for Henderson Opportunities (HOT), CQS Natural Resources Growth & Income (CYN) and European Smaller Companies (ESCT) are due this week, with Edinburgh Worldwide (EWI) holding a vote on 14 February.