The Baillie Gifford US Growth Trust has appealed to City minister Lucy Rigby to revise existing regulations, aiming to counter what it describes as a "threat" from the US activist hedge fund Saba Capital. Tom Burnet, the trust's chair, has written to Rigby and Scottish secretary Douglas Alexander ahead of a crucial shareholder vote on the trust's future in two weeks.
The call for reform comes as the investment trust is engaged in a dispute with Saba Capital, which has accumulated a stake of nearly 30 per cent. Saba Capital, led by Boaz Weinstein, has been active against London-listed trusts, with the Baillie Gifford trust being its latest target over the past 18 months.
Burnet's letter, shared with City AM, warns that without prompt action, more investment trusts and their ordinary savers could be affected by similar tactics. Saba Capital has accused the trust of consistent underperformance and has put forward three executives for board positions, which shareholders will consider at the annual general meeting on 23 October.
Burnet has urged the government to introduce reforms, including requiring activist shareholders to meet the same information disclosure standards as the boards of listed companies. He also recommended supporting the Financial Conduct Authority's work on closed-end funds and making it easier for investors holding shares through intermediaries to vote in meetings.