Saba Capital Management's latest attempt to secure board representation at Baillie Gifford US Growth Trust has been narrowly defeated, with each of its three nominees receiving approximately 47% support at the trust's 2026 AGM.

The closely contested result marks a third victory for the incumbent board in under two years, but the scale of support for Saba suggests pressure on the trust is unlikely to disappear.

A third victory for the incumbent board

At the 2026 AGM, Saba Capital Management, the trust's largest shareholder, nominated three directors to replace board members standing for re-election. Each nominee attracted roughly 47% support and 53% opposition, while the four incumbent directors secured around 53% support and 47% opposition.

The AGM also saw notable shareholder dissent on several management resolutions. Four proposals received opposition approaching 37%, including the resolution to approve the implementation report on remuneration policy and a resolution granting directors authority to issue shares. Two of these resolutions did not pass due to them needing a supermajority of 75% votes in favour. This underlines that a large shareholder can materially impact outcomes subject to higher thresholds.

This marks the third time in under two years that shareholders have backed the incumbent board. Investors first rejected Saba's attempt to gain control at a requisitioned general meeting in February 2025, when turnout reached approximately 78%.

Baillie Gifford US Growth Trust was also one of the so-called Saba Seven – companies which were targeted in 2024. Saba held roughly 19%-29% at each trust and lost all initial seven votes.

Shareholders did so again at the trust's 2025 AGM, re-electing the existing directors despite Saba's growing stake. Support remained narrow: none of the four directors received more than 52% of votes in favour, while the remuneration policy faced more than 47% opposition.

Turnout reflects the significance of the campaign

The Association of Investment Companies (AIC), a longstanding critic of Saba's investment trust activism, welcomed the outcome.

“Shareholders have come out in force to support the existing board of Baillie Gifford US Growth Trust and reject Saba’s nominated directors,” said Richard Stone, the AIC's chief executive. “This is the third time the trust’s shareholders have voted to endorse the current board, but the result was not a foregone conclusion. It was only possible due to a big push from the trust, its manager, the wider industry and the media, resulting in a very high turnout.”

Turnout exceeded 82%, above the 78% recorded at the February 2025 requisitioned meeting and sharply higher than the 58% at the 2025 AGM, 38% in 2024 and 26% in 2023. This matters because trusts often have large retail shareholder bases with lower voting participation; without the exceptional turnout, Saba's campaign may have succeeded.

Part of a broader campaign across the sector

The vote forms part of Saba's broader UK investment trust campaign, whose success cannot be measured solely by whether it wins board seats.

In December 2025, Saba blocked a proposed merger between Baillie Gifford US Growth Trust and Edinburgh Worldwide Investment Trust (EWIT). It subsequently secured control of the EWIT board in April 2026 after building a stake, alongside a small group of US funds, exceeding 40%.

At EWIT, eight resolutions failed and three Saba-backed candidates were elected, resulting in a board composed entirely of Saba nominees. The episode represented one of the most significant director election contests of the 2026 UK proxy season.

Meanwhile, at Impax Environmental Markets, Saba replaced the board with all incumbent directors replaced by its four nominees. It also retained a 29.9% stake following a large exit tender conducted after a requisitioned shareholder meeting.

Saba often targets trusts trading below net asset value (NAV), the value of their underlying assets. An exit at or near NAV can therefore allow it to realise that discount without taking control of the board. Several campaigns have produced liquidity outcomes even after Saba initially failed to secure board changes, including at Middlefield Canadian Income, European Smaller Companies and CQS Natural Resources Growth & Income, with Saba subsequently exiting its position and, in some cases, agreeing to three-year standstill arrangements.

For a trust, such an arrangement may avoid a prolonged activist battle, preserve the trust, reduce uncertainty around its discount and give other shareholders an exit. The EWIT and Impax cases were examined in Minerva Analytics' UK Proxy Season Review 2026 briefing and webinar.

Regulatory scrutiny follows activist pressure

In April, the AIC proposed reforms intended to address perceived weaknesses in the UK Listing Rules following several high-profile activist interventions. The Financial Conduct Authority subsequently launched a consultation on potential changes to the listing framework for closed-ended investment funds. The consultation closed on 14 August, with revised rules expected before year-end.

The AIC welcomed the proposals, with Stone arguing that the reforms would "strengthen investor protection, particularly when a substantial shareholder like Saba Capital seeks to replace the board and become the manager".

Saba's efforts have also faced challenges outside the UK. In June 2026, the US Supreme Court issued a ruling limiting shareholders' ability to pursue certain private lawsuits under the Investment Company Act of 1940, reducing one of the legal avenues available to activist investors alongside traditional proxy campaigns.

What shareholders signalled

Although Baillie Gifford US Growth Trust has again resisted Saba’s attempt to secure board representation, the result is not an unequivocal endorsement of the status quo. Nearly half of votes cast supported the activist’s nominees, while management resolutions continued to attract substantial opposition.

The immediate board challenge failed, but the wider campaign may continue. Persistent discounts and weak performance can no longer be treated as issues that boards can simply wait out, with liquidity measures increasingly emerging as a practical response to activist pressure.

The campaigns also underline the importance of retail participation, as low turnout can amplify a large activist holding. Yet wholesale board replacement raises questions about director independence, conflicts of interest and minority shareholder protection. Trust boards must respond to shareholder concerns while ensuring decisions serve shareholders as a whole.