Key Takeaways
- • Baillie Gifford US Growth's board has rejected Saba Capital's bid for control, revealing that Saba turned down a 99.75% net asset value (NAV) exit offer worth "many millions of pounds" in transaction costs covered by the fund manager, signaling the hedge fund's commitment to board replacement rather than liquidity.
- • The £980m investment trust faces a shareholder vote on 23 October at its annual general meeting where Saba's three board replacement resolutions will be decided; the board characterizes this as an "existential" threat to the fund's strategy of investing in exceptional US growth companies including SpaceX, Anthropic, OpenAI, and Alphabet.
- • Saba Capital currently holds a 29% stake in the trust, while a second New York-based hedge fund, Sessa Capital, disclosed a 5% position last week and is believed likely to support Saba's activist campaign, potentially giving Saba-aligned investors combined influence exceeding retail shareholders.
- • Private investors collectively hold 22% of the trust through retail investment platforms (Hargreaves Lansdown, AJ Bell, Interactive Investor), and Chair Tom Burnet explicitly appealed to this retail bloc to vote against Saba's resolutions, noting that strong turnout could shift voting dynamics in the board's favor.
- • This marks the third activist campaign by Saba against Baillie Gifford US Growth within 21 months, establishing a pattern of sustained pressure on the fund's investment approach and governance structure.
Summary
Baillie Gifford US Growth has released its formal defence against Saba Capital's activist campaign ahead of an October 23 annual general meeting that will determine the fund's future direction. Chair Tom Burnet published a detailed rebuttal to three shareholder resolutions that would remove the current board and install Saba nominees, characterizing the hedge fund's push as an "existential" threat to the £980m investment trust's established strategy of concentrated exposure to exceptional US growth companies.
The disclosure that Saba rejected a 99.75% NAV exit offer—with Baillie Gifford covering substantial transaction costs—provides concrete evidence of the hedge fund's intent to pursue board control rather than seek liquidity from its 29% stake. The fund manager's willingness to absorb "many millions of pounds" in costs underscores both the board's conviction in its strategy and Saba's resolve to reshape the trust's governance and investment approach. Burnet directly addressed this rejected exit, implying that Saba's rejection demonstrates tactical commitment to activist goals rather than financial optimization for shareholders.
The competitive shareholder landscape adds complexity to the October vote. Retail investors collectively represent 22% of the trust through major platform intermediaries, positioning them as a potentially decisive voting bloc if turnout is strong. However, Sessa Capital's recent 5% stake disclosure introduces another layer of uncertainty, as the New York-based special situations hedge fund is believed likely to support Saba's resolutions despite no documented activist history. Combined, Saba and Sessa would control 34% of voting power if aligned, though retail shareholder mobilization could mathematically outnumber this if engagement is robust.
Burnet's public appeal to private investors to vote their shares emphasizes that turnout intensity will prove decisive. This marks the third activist campaign by Saba against the trust in 21 months, indicating sustained pressure on Baillie Gifford's investment philosophy and governance model. The board's defense focuses on protecting the fund's concentrated portfolio strategy, directly contrasting with implied criticism from Saba regarding performance, fees, or portfolio composition—though specific Saba demands remain undisclosed in this disclosure.
The disclosure that Saba rejected a 99.75% NAV exit offer—with Baillie Gifford covering substantial transaction costs—provides concrete evidence of the hedge fund's intent to pursue board control rather than seek liquidity from its 29% stake. The fund manager's willingness to absorb "many millions of pounds" in costs underscores both the board's conviction in its strategy and Saba's resolve to reshape the trust's governance and investment approach. Burnet directly addressed this rejected exit, implying that Saba's rejection demonstrates tactical commitment to activist goals rather than financial optimization for shareholders.
The competitive shareholder landscape adds complexity to the October vote. Retail investors collectively represent 22% of the trust through major platform intermediaries, positioning them as a potentially decisive voting bloc if turnout is strong. However, Sessa Capital's recent 5% stake disclosure introduces another layer of uncertainty, as the New York-based special situations hedge fund is believed likely to support Saba's resolutions despite no documented activist history. Combined, Saba and Sessa would control 34% of voting power if aligned, though retail shareholder mobilization could mathematically outnumber this if engagement is robust.
Burnet's public appeal to private investors to vote their shares emphasizes that turnout intensity will prove decisive. This marks the third activist campaign by Saba against the trust in 21 months, indicating sustained pressure on Baillie Gifford's investment philosophy and governance model. The board's defense focuses on protecting the fund's concentrated portfolio strategy, directly contrasting with implied criticism from Saba regarding performance, fees, or portfolio composition—though specific Saba demands remain undisclosed in this disclosure.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.