Baillie Gifford US Growth Trust Warns of Hedge Fund "Raid"

Baillie Gifford US Growth Trust has issued a strong warning to shareholders regarding a "raid" by hedge fund billionaire Boaz Weinstein's Saba Capital, urging them to vote against Saba's plans to replace the trust's board at the upcoming general meeting. The trust alleges that Saba, which has accumulated a 29 percent stake, is "intent on obtaining control of the company at the expense of other shareholders."

Saba Capital is seeking to appoint three directors to the trust's board, following two previous attempts to influence its direction over the past 18 months. The hedge fund has criticized the trust's directors, claiming they have prioritized Baillie Gifford's interests over those of shareholders, offering exits at or near the net asset value (NAV).

However, Baillie Gifford US Trust chair Tom Burnet stated that Saba has shown no interest in liquidity, having previously declined an opportunity to sell its stake at 99.75 percent of NAV. Burnet asserted that Saba's actions suggest a motive beyond simply achieving liquidity for itself.

Weinstein has been vocal in his criticism of the US Growth Trust, pointing to its failure to deliver significant gains for investors. This is despite the fund's early investments in high-profile unlisted growth companies such as SpaceX, OpenAI, and Anthropic. The trust acknowledged periods of "considerable volatility" but attributed it to the inherent nature of investing in ambitious growth companies whose long-term potential may take years to materialize.

Baillie Gifford highlighted that the trust's share price discount to NAV had narrowed considerably, from 9.4 percent to 0.1 percent in the year leading up to May 31, 2026. During the same period, its NAV per share total return was 31 percent, surpassing the S&P 500's return of 29.8 percent.

The trust contends that appointing Saba's proposed directors, including managing director Sir James Waterlow, would signal the end of its current strategy and lead to a transition that benefits Saba primarily. Baillie Gifford stated that such a move would compromise the board's independence and further Saba's own interests.

This engagement is part of a broader campaign by Saba Capital against London-listed investment trusts. Saba previously succeeded in ousting the board of the Edinburgh Worldwide Investment Trust, also managed by Baillie Gifford. More recently, Gore Street Energy Fund narrowly defeated Saba in a wind-down vote.

Investment analyst James Carthew commented on the situation, noting that the US Growth Trust faces the disruption and expense of fending off an activist investor. Carthew urged shareholders to reject Saba's proposals, citing Saba's track record of "failures" and calling for the hedge fund to withdraw its attention from UK investment companies.