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EQ SHAREHOLDER SERVICES | AUGUST 2025
Baillie Gifford Trusts: Saba Capital Requisition General Meetings
Keystone Positive Change Investment Trust plc (KPC), Baillie Gifford US Growth Trust plc (USA), and Edinburgh Worldwide Investment Trust plc (EWI) were the three closed-end investment companies managed by Baillie Gifford that received, on the 18th December 2024, requisition notices from the US-based activist hedge fund Saba Capital Management.
The trusts were requested to hold Requisition General Meetings (RGMs) where the shareholders of the companies would vote on resolutions to remove non-executive directors from the boards of the trusts and appoint directors selected by Saba. The RGMs were due to take place in February 2025.
The boards of the trusts’ recommendation to their shareholders was to vote against Saba’s proposals at the RGMs and in favour of the boards’ resolutions. However, given Saba’s significant interest in the three stocks (KPC: 29.65%; USA: 29.30%; EWI: 25.10%), the boards had an enormous task at hand: reach out to investors in order to garner support ahead of the RGMs. This would be especially difficult because retail investors make up over half of the trusts’ share registers, with one of the trusts reaching just under 70% of their share register comprised by retail holders. The disconnect between retail holders and the trusts has led to low voter turnout at AGMs over the years, with the three trusts experiencing voter turnout lower than 40% of their total issued share capital (ISC) at their respective AGMs in 2024. Boaz Weinstein, the manager and founder of Saba Capital, also ramped up efforts to convince shareholders to side and vote with Saba. These efforts included a webinar, news articles, and social media posts heavily criticising Baillie Gifford’s track record on managing investment trusts, emphasising the three trusts’ 3-year average discount to NAV.
Although things were looking unfavourable for the Baillie Gifford-managed investment trusts, their cause was supported by relevant entities in the industry, most notably the Association of Investment Companies (AIC). The support was mainly focused on encouraging retail investors to vote, and for trading platforms such as Vantage and Interactive Investor to facilitate the voting process for the retail investors. The Financial Conduct Authority (FCA) also reminded EO Brokers that they needed to notify this event to their underlying clients.
Objective
To use our in-house EQ RD:IR expertise to reach out to the shareholders of USA, KPC, and EWI in order to maximise their participation at the RGMs and vote in favour of the Boards’ recommendations and against Saba Capital’s proposals.
What we did
As an existing client, our EQ RD:IR team conducts regular share register analysis for the three Baillie Gifford investment trusts, monitoring large transactions on a daily basis and reporting Saba’s equity position in the stocks as well as potential derivative positions via trading accounts to the client (services that we carried on providing throughout Saba’s campaign).
With the Christmas holidays upon us and there being a very short period of time between Saba’s requisition notices and the day of the RGMs, EQ RD:IR was swiftly engaged by Baillie Gifford to apply our expertise and services to help the trusts engage with retail holders with information regarding Saba’s RGMs.
Our team at EQ RD:IR promptly began working on the s793 retail reach out project. We started by using the latest share register analyses conducted for each of the three Baillie Gifford trusts at the time to identify where retail holders’ shares were held on the registers (mainly held via EO Broker platforms including Hargreaves Lansdown, Interactive Investor, and AJ Bell).
Our team then sent out disclosure requests under Section 793 of the UK Companies Act 2006 to the identified platforms in order to gather contact details of the retail shareholders of the three trusts. Once the collection of names and addresses of the retail holders was complete, our team worked collaboratively with Baillie Gifford to reach out to these investors by mail with messaging regarding the RGMs, encouraging shareholders to vote at the meetings and providing instructions on how they can vote on their shares.
Baillie Gifford’s involvement in the drafting and reviewing of the mailings across multiple stakeholders meant that the mailed messages were tailored to each trust’s specifications. Flyers, letters, and leaflets were sent out to retail investors across the three trusts, with coverage ranging from around 30% of USA’s and KPC’s ISCs to 43% in the case of EWI.
It is important to emphasise that, although there was a short period of time between the requisition notices and the RGMs, time was of the essence and this joint effort between EQ RD:IR and Baillie Gifford ensured that the mailing exercise was delivered within the set timescale.
Outcome
The shareholders of all three Baillie Gifford trusts resoundingly rejected Saba Capital’s proposals at the RGMs. Voter turnout at the RGMs significantly increased in comparison to the AGMs held in the previous year.
KPC saw voter turnout increase from 23.09% at its 2024 AGM to 71.83% at the 2025 RGM; EWI saw an increase from 17.32% at the 2024 AGM to 64.70% at its RGM; and USA’s turnout increased from 37.87% at its 2024 AGM to 78.40% at the RGM.
The services provided by EQ RD:IR to Baillie Gifford not only have brought awareness to investors around the circumstances that the trusts they are invested in are going through, but they also engaged disconnected investors, allowing them time to do their research and vote at the RGMs taking informed decisions. The s793 retail holder reach out exercise has provided the trusts with an opportunity to maintain a line of communication with these investors and build upon the relationship formed, keeping them informed and engaged in the trusts’ affairs.