Hedge fund Saba takes on Baillie Gifford in new board battle
Boaz Weinstein’s activist fund has been waging a campaign against UK investment trusts
Boaz Weinstein’s activist hedge fund Saba is seeking to install its own candidates on the board of a Baillie Gifford investment trust, as the US billionaire renews his onslaught on the sector.
The hedge fund on Monday put forward three candidates for the board of Baillie Gifford’s US Growth Trust to be voted on at the investment trust’s annual general meeting later this year, having twice been rebuffed in attempts to influence the board over the past 18 months.
The US Growth Trust invests in public or private companies which it believes will grow rapidly and holds stakes in companies including Nvidia, Anthropic and Amazon.
But while the £906mn investment trust was an early investor in SpaceX alongside other Baillie Gifford trusts, it has made virtually no gains over the past five years after sustaining heavy losses in 2022. It has spent much of the time since then recovering losses, with the value of its holdings up 240 per cent since launch in 2018.
Filings from December last year showed that Saba has a 28 per cent shareholding in the US Growth Trust, with a further 1 per cent in derivatives that gave it economic exposure to the shares.
Saba’s candidates include Sir James Waterlow, a managing director at the hedge fund, and two other candidates whom Saba has previously nominated in other board battles.
Saba has not commented on its latest board proposals, but it previously complained about performance and the discount the shares had traded at relative to the assets they manage.
Such discounts affect many investment trusts because, unlike many other fund structures, there is no easy way to redeem shares for the underlying net asset value.
The trust is trading at an 8 per cent discount to its net asset value, tighter than the 11 per cent five-year average.
Saba has been running a campaign against several UK investment trusts since 2024, with mixed results. Saba has mixed up its tactics throughout its campaigns, variously calling for share buybacks to close discounts, changes in investment strategy, or even to wind up trusts.
In April, it took control of the board of another Baillie Gifford trust, Edinburgh Worldwide, on its third attempt. But its attempt to change the board at real estate investment trust Workspace failed in July.