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Fight back against Saba! – let us show you how

Saba Capital, a US-based hedge fund, has been on the offensive against the UK’s investment trust sector. Having built substantial stakes in seven investment trusts, ranging from 20% to just shy of 30% of the trusts’ outstanding shares (a key level that would require them to make a bid for the trust), it is using these positions to seek to gain full control of these funds.

In an announcement made on 18 December, Saba Capital declared its intention to remove all members of the existing boards of these trusts and replace them with much smaller boards. Under Saba’s proposals, each board would comprise just two directors – both of which are Saba nominees and one of whom is a Saba employee – neither of which have previous experience of UK investment trusts.

In the letters that Saba wrote to fellow shareholders in all of these trusts when it issued the requisition notices to their boards, Saba also made clear its plans to dismiss the current investment managers of all of these trusts and substitute itself as the manager instead. Saba also revealed that its ultimate objective is to merge these trusts into a single entity and operate it as a fund of investment trusts, with their objective being to profit off the discounts of other investment trusts – something that not only erodes the options available to UK investors but, more importantly for existing shareholders, is not a strategy that they originally signed up for and, given the complex leverage and derivative instruments that Saba has used in its existing fund of closed end funds in the US, may not be suitable for them.

We believe that Saba’s intentions, and the timing of its announcements, are self-serving and designed to put it in the best possible light, while intentionally underplaying the advantages of its targeted trusts. Myriad criticisms have been levelled at Saba’s proposals – from selecting performance time frames that misrepresent the true long term returns of their targeted trusts to strong concerns over corporate governance and whether their proposed structures could breach the Companies Act – and we have published several articles outlining our arguments against these (you can find our initial announcement here).

We believe that Saba’s proposals are fundamentally flawed and pose significant risks for all other shareholders in these funds. However, with so much at stake and Saba relying on historically low shareholder participation in votes to get its agenda through, we believe that all investors need to get themselves informed and cast their vote at the upcoming general meetings.

If you don’t know how to vote, use our table below to identify your trusts and platforms, and follow the links to see how to cast your vote.

Key information

For most platforms, they will require you to either provide instruction online through your share dealing account, or by sending instruction to their office via mail or electronic chat.

Deadlines vary by platform however they are typically at close of business two to five working days before the meetings, with the majority of them closing their deadlines three days before the general meeting.

We strongly encourage readers to vote as soon as possible – our dates are a best effort estimate of when the deadlines will close. Voting is also done on a best-efforts basis by these platforms and any votes submitted close to the date of a general meeting may not have sufficient time to be counted.

How to vote on each platform

Hargreaves Lansdown click here for their guide
Interactive investors click here for their guide
Aj Bell click here for their guide
Barclays smart investors Customers should call Barclays or start a chat while logged into their account if they would like to vote by proxy or attend the AGM/EGM in person.
Charles Stanley Direct You send Charles Stanley a secure message via your online account. Provide the name of the stock along with your clear instructions stating how you wish to vote on all the resolutions.
Fidelity Personal Investing click here for their guide
HSBC You can either call the share dealing help desk or send a secure message from your online share dealing account confirming the voting details.   Provide the name of the stock along with your clear instructions stating how you wish to vote on all the resolutions.
Halifax Either provide your instruction online or via the mobile banking app by signing in to your account and selecting ‘corporate actions’ in the right hand navigation then ‘notifications’ and choosing the relevant account.
Alternatively you can send your instruction by post to Halifax Share Dealing Limited, Lovell Park Road, Leeds LS1 1NS

 

Herald Investment trust – read our latest research here

Meeting date: 22/01/2025 – Result: convincing win for the board, 80% turnout, just 0.15% of shares voted alongside Saba

Baillie Gifford US Growth

Meeting date: 03/02/2025

Keystone Positive Change

Meeting date: 03/02/2025

CQS Natural Resources Growth & Income – read out latest research here

Meeting date: 04/02/2025

Henderson Opportunities Trust

Meeting date: 04/02/2025

European Smaller Companies Trust

Meeting date: 05/02/2025

Edinburgh Worldwide

Meeting date: 14/02/2025

 

 

1 thought on “Fight back against Saba! – let us show you how”

  1. Great to see you have followed up with the commentary and provided the practical information on how to vote for the key platforms. I signed up for voting last week with Interactive Investor and HL. Also good to see you making a clear recommendation, I’ve seen lots of pieces (& podcasts) about the importance of voting since Saba came on the scene but most commentators have been a bit reticent about recommending voting against

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