Saba Capital’s plans to seize control of seven UK-listed investment trusts lay in tatters. Investors came out in large numbers to resoundingly reject plans to remove the boards of the trusts and replace them with one selected by Saba.
With six of the seven votes to remove the boards of investment trusts complete, the US hedge fund appears to have misjudged investor support for their investment trusts.
“It’s clear that shareholders value investment trusts’ long-term approach to investing and the independent oversight provided by boards of directors,” said Richard Stone, Chief Executive of the Association of Investment Companies (AIC).
The backing of Saba Capital’s plans was pitiful. One wonders whether the investors who backed the resolutions ticked the wrong box by mistake.
In the poll to remove the board of The European Smaller Companies Trust, 99.5% of votes cast by shareholders, other than Saba Capital, rejected Saba’s proposals.
Only 0.8% of votes, other than those of Saba Capital, supported the requisitioned resolutions to remove the board of Keystone Positive Change Investment Trust.
Herald Investment Trust, Baillie Gifford US Growth Trust, CQS Natural Resources and Henderson Opportunities Trust all won by similar margins.
The retail investor was vitally important in securing victories for the Investment Trusts. For many of the trusts, the retail vote had the potential to swing the result, and there was a risk that if retail investors didn’t cast their votes, Saba’s resolutions may have passed.
However, concerns that retail investors wouldn’t bother to vote proved unfounded, and their participation was crucial in a number of the votes.
“There were fears among the investment trust industry that retail investors would not stand up and be counted. However, our customers have debunked those concerns and have shown up in high numbers to cast their votes,” said Kyle Caldwell, Funds and Investment Education Editor at interactive investor.
“For the six investment trusts that have voted against Saba’s proposals, between 69% and 76% of shares were voted across the interactive investor platform. This shows that when shareholders are being asked to vote on a big issue – they turn up in big numbers.”