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A record number of shareholders have voted via Hargreaves Lansdown in the battle between US activist Saba Capital and seven UK investment trusts.
The UK’s largest direct-to-consumer investment site said it had experienced an unprecedented level of voting among investment trust shareholders as they cast their view on Saba’s proposal to overturn the boards of the trusts.
Hargreaves Lansdown said 41 per cent of its customers who hold the Herald investment trust had voted. Saba lost the vote this week.
The turnout will allay concerns that individual shareholders, who tend to be less engaged than professional investors, would not turn up to vote.
Saba’s attempt to replace the boards of the seven trusts with its own proposed candidates represents one of the biggest shake-ups of the 150-year-old investment trust industry, which manages some £260bn.
Boaz Weinstein, founder of Saba, said that if the hedge fund was successful, it would put itself forward to manage the trusts to replace existing managers Herald, Janus Henderson, Manulife and Baillie Gifford.
Hargreaves Lansdown said nearly one in two of their customers who back the European Smaller Companies trust, run by Janus Henderson, had voted so far.
The investment site added the level of votes cast for each of the trusts has been a record. The other trusts include Keystone Positive Change, Baillie Gifford US Growth, Henderson Opportunities, CQS Natural Resources Growth & Income, and Edinburgh Worldwide Investment Trust.
“We have seen a significantly higher proportion of clients voting than normal as a result of our campaign to proactively inform clients,” said Emma Wall, head of platform investments at Hargreaves Lansdown.
“While this is something to celebrate, we urge those who have not yet voted to do so, as it’s really important they exercise their right to vote. Shareholder rights are one of the key benefits of the investment trust structure.” She added that the deadline to vote on five of the trusts is the end of January.
Investment trusts are closed-ended funds and their shares trade on the London Stock Exchange. However, share prices have tended to lag behind the net asset value of the trusts in recent year, which Weinstein has shone the spotlight on.
The average investment trust discount stands at around 15 per cent, according to the Association of Investment Companies. The widest average discount since the financial crisis was recorded at nearly 19 per cent in October 2023.
Saba needs more than 50 per cent of votes cast in favour at each trust in order to win.
https://www.ft.com/content/91dbc3f4-9d88-4b29-a453-8411936132d3
