Besieged trusts urge investors to come out and vote to fire US corporate raider Saba

The bosses of seven investment funds targeted by a US corporate raider have urged Mail readers who own shares to exercise their right to vote and oppose plans to overhaul their businesses.

Saba Capital, led by Wall Street financier Boaz Weinstein, is proposing replacing trust directors with its own candidates, saying leaders have “failed shareholders” and made bad decisions.

It has stakes in each company ranging from 19 to 29 percent and needs to gain the support of 50 percent of voting shareholders to succeed.

As a result, you will win if other investors do not actively vote against the proposals.

The trust’s chairmen have accused Saba of trying to “sweep” its way into control of its businesses by relying on many ordinary shareholders not voting.

The main industry lobby group for UK investment funds has warned the City watchdog that current rules “do not protect the interests of retail shareholders” over fears smaller investors have not been adequately informed about Saba’s plans.

Andrew Joy, chairman of the Herald Investment Trust, which is first up for a vote on Wednesday, told the Mail that “every shareholder’s voice matters”.

He urged them to “protect their investment” and “vote against Saba’s proposals.”

Tom Burnet, president of the Baillie Gifford US Growth Trust, said many small shareholders believe “their votes don’t count” despite owning 30 percent of the trust’s shares, compared to Saba’s 25 percent.

He said: ‘We don’t want investors to be complacent. “We want to defeat Saba significantly.”

While the hedge fund has substantial stakes in each of the trusts, it is outnumbered by private investors in almost all of them.

Christopher Casey, chairman of the CQS Natural Resources Growth & Income Trust, said its small investors, who own 44 per cent of the trust, risked being “disenfranchised” if Saba is successful.

“People should understand the importance of their vote,” he said, adding that it was “no coincidence” that the US firm had targeted trusts with a large number of retail investors. “They’re trying to bulldoze their way through.”

The comments came as the Association of Investment Firms wrote to the Financial Conduct Authority urging it to change the rules so that retail investors were automatically informed of plans to change the investment trust’s strategy or its leadership.

“With so much at stake, the regulator cannot simply rely on people to do the right thing,” said the association’s chief executive, Richard Stone.

He added that where “significant changes” to a trust were proposed, investment platforms such as Hargreaves Lansdown, AJ Bell and Interactive Investor should “actively contact their clients to encourage voting”.