Baillie Gifford US Growth Trust successfully rejected a takeover attempt by activist hedge fund Saba at its annual general meeting, marking the third time the US-based investment firm was rebuffed in its efforts to gain control. Shareholders voted against Saba’s proposal to appoint three new directors to the trust’s board, with 52.8 percent voting to reject the nominations. The trust reported that 99 percent of votes cast by shareholders independent of Saba and its affiliates were opposed to the hedge fund’s nominees.

Saba, led by Boaz Weinstein, had accumulated a 29 percent stake in Baillie Gifford US Growth Trust, aiming to assert influence over the trust’s management and strategy. Despite previous unsuccessful attempts over the past 18 months, Saba persisted in its campaign to reshape the board. The trust’s chairman, Tom Burnet, described the outcome as a decisive victory, stating earlier this month that he intended not only to win but to “thump” Saba in the proxy battle.

Baillie Gifford US Growth Trust has attracted investor interest with its long-term holdings, including a stake in SpaceX secured prior to the firm’s public listing, as well as significant investments in AI company Anthropic and semiconductor manufacturer Nvidia. Many of the trust’s shareholders are retail investors who have supported the existing management’s approach.

The vote saw strong participation, with more than 82 percent of shareholders casting ballots. Following the vote, Baillie Gifford emphasized the widespread support from independent shareholders, viewing the outcome as a clear endorsement of the current management and strategy.

Saba’s Weinstein defended the hedge fund’s activism, stating that the firm targets investment trusts that underperform and that its efforts aim to enhance returns for all shareholders. In addition to Baillie Gifford US Growth Trust, Saba has pursued board changes at other trusts, including Impax Environmental Markets, Keystone Positive Change, and Herald. Weinstein notably succeeded earlier this year in replacing the board of the Edinburgh Worldwide Investment Trust, another Baillie Gifford-managed fund.

In the aftermath of the latest vote, Burnet called for regulatory reforms from the Financial Conduct Authority to better protect investment trusts from activist campaigns that he described as opportunistic and not aligned with the interests of all shareholders. Independent analysts welcomed the result, with Matthew Read of QuotedData characterizing the outcome as a “victory for common sense and shareholder democracy.”