Key facts
- Saba Capital has nominated three candidates for the board of the US Growth Trust.
- This is Saba's third attempt to influence the Baillie Gifford-managed investment trust.
- Saba Capital owns nearly 30% of the US Growth Trust.
- The activist investor has previously argued that the trust's discount to net asset value is too wide.
- One of the proposed directors, Sir James Waterlow, is a managing director at Saba Capital.
Activist hedge fund Saba Capital has initiated its third campaign against Baillie Gifford's US Growth Trust (USGT) in less than two years, nominating three candidates for the trust's board ahead of its upcoming general meeting. This latest move by the fund, led by Boaz Weinstein, continues Saba's broader strategy of targeting London-listed investment trusts.
Saba has previously argued that the USGT's investment decisions have led to a widening discount between its share price and the value of its underlying assets. The hedge fund, which holds nearly 30% of USGT, is proposing directors it claims would act independently, though analysts suggest the ultimate goal may be to gain control of the board and alter the trust's investment policy, potentially shifting it towards UK closed-ended funds.
The challenge also brings renewed focus on the US Growth Trust's performance. Despite early investments in companies like SpaceX and Anthropic, and operating within a sector that has seen significant growth, the trust's share price has not recovered to its five-year high. The trust experienced a substantial decline in 2022 but has since rallied, recovering almost all its losses over the past year.
Analysts view Saba's strategy as a potential 'war of attrition,' aiming to exhaust other shareholders into conceding control. While regulatory changes are being considered to potentially curb such tactics, they are not yet in effect. Both Baillie Gifford and Saba Capital declined to comment on the latest developments.