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Baillie Gifford trust chair to raise activist campaign complaints with City minister
City minister Lucy Rigby has offered to meet Baillie Gifford’s US Growth chair, Tom Burnet, to discuss safeguards against activist campaigns targeting investment trusts. The proposed meeting follows US hedge fund Saba Capital’s failed attempt to change the trust’s governance and install three directors, and comes amid wider concern about the effect of such campaigns on London’s closed-end funds.
More than 99 per cent of shareholders unaffiliated with Saba voted against its resolutions, though the result was narrow because Saba and ally Sessa Capital held significant voting influence and retail turnout was a concern. Burnet has called for closer scrutiny of activist communications, fewer barriers to shareholder voting and support for an FCA consultation; the regulator is expected to announce proposed changes by early next year. Saba has secured changes at other trusts, including Edinburgh Worldwide, Herald and Impax Environmental Markets.
In short
- The government has offered to hear safeguards proposed by US Growth’s chair.
- More than 99 per cent of non-Saba shareholders opposed Saba’s resolutions.
- The FCA is expected to announce proposed changes early next year.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Investment trust boards and their supporters can argue that activist campaigns may use concentrated holdings and forceful communications to push through changes that do not reflect the wider shareholder base, especially when retail investors are less likely to vote. Safeguards and clearer scrutiny could help ensure votes are informed and representative while giving trusts room to pursue long-term investment strategies.
The case against
Activist investors can argue that concentrated ownership gives them a legitimate way to press for accountability when trusts persistently underperform or fail to respond to shareholders. Easier voting and fewer barriers to campaigns can give dispersed retail investors more influence, and tighter safeguards risk entrenching boards or making it harder to secure needed changes.
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