Three prominent shareholder voting advisers have recommended that investors in Baillie Gifford US Growth Trust reject proposals from activist hedge fund Saba Capital to appoint three nominees to the investment trust’s board.
Glass Lewis, Institutional Shareholder Services and PIRC have advised shareholders to vote against resolutions one to three at the annual general meeting scheduled for 23 October 2026. All three have also recommended backing the reappointment of existing directors under resolutions four to seven, according to a regulatory announcement published by the trust on 12 October.
Glass Lewis, ISS and PIRC have each recommended votes against the Saba resolutions, adding to the pressure on the activist ahead of the meeting. Their advice is influential but non-binding: the outcome will be determined by shareholders, including those who vote through investment platforms and nominees.
Saba Capital has sought changes to the board of the investment company, proposing Jason Chen, Thomas H McGlade and James Waterlow as directors. The trust’s current board opposes the appointments and argues that its independence and strategy could be affected if Saba’s nominees were installed.
Investment trusts are listed companies whose shares trade on a stock exchange and whose boards oversee an appointed investment manager. Their share prices can differ from the net asset value of the investments they hold, creating opportunities for activist investors who believe the market discount can be narrowed or value realised through structural change.
Activism of this kind can raise difficult questions about the balance between liquidity for shareholders, long-term investment performance and the governance arrangements needed to supervise managers. Investors may disagree about whether a change in directors is the best way to improve returns, even when they share concerns about a discount to net asset value.
The Baillie Gifford US Growth Trust invests in US growth businesses and has attracted attention from Saba, which has campaigned for changes at several UK-listed investment companies. The latest board contest follows earlier challenges and reflects a wider argument about the rights of activist shareholders and the stewardship obligations of incumbent directors.
In its announcement, the board highlighted the convergence of recommendations from the three voting advisers. It wants shareholders to oppose the Saba resolutions and support the existing directors. The trust’s circular, distributed in September, explains the board’s position and sets out the resolutions on which investors will be asked to vote.
Saba’s perspective is relevant to the dispute even where the current board contests its conclusions. Activist campaigns commonly argue that poor market ratings, limited liquidity or governance structures can prevent shareholders from realising the value of underlying assets. Assessing those arguments requires consideration of both the proposed remedy and the effect it could have on the trust’s mandate.
The board’s supporters argue that a change in control could redirect the trust away from its established investment approach. That concern remains a matter for shareholders to assess rather than a proven consequence of installing new nominees. Similarly, opposing a dissident slate does not necessarily resolve every concern about performance or valuation.
Intermediary platforms may set voting deadlines earlier than the formal shareholder meeting. The company’s announcement states that proxy votes should reach the registrar by 21 October, with the meeting due to take place at 1pm on 23 October. Shareholders using nominee accounts may face an earlier administrative cut-off.
The advisers’ recommendations may influence the vote, particularly among holders who rely on independent guidance when considering contested director appointments. Shareholders will ultimately decide whether to retain the existing board or support Saba’s nominees, and the outcome cannot be inferred from the recommendations alone.
The 23 October meeting will determine the immediate balance of board representation. Behind the dispute lies a continuing disagreement over how an investment trust should respond when its shares trade at a discount to the assets it holds and shareholders have competing views on liquidity and long-term performance.
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