Activist hedge fund Saba Capital has launched a new challenge against the Baillie Gifford US Growth Trust (USGT), proposing three candidates for its board. This move, disclosed by Baillie Gifford in a stock exchange filing on Monday, is the third such attempt by the Boaz Weinstein-run fund against USGT in less than two years, with two prior efforts since early 2025 having been rebuffed.
Saba Capital, which holds nearly 30 per cent of USGT, has not commented on its latest proposal. However, the hedge fund has previously argued that USGT's decision-making has widened the trust's discount relative to the value of its investments. One of the proposed directors is Sir James Waterlow, a managing director at Saba Capital.
Emma Bird, head of investment trusts research at Winterflood Research, believes Saba's intention is to "replace the incumbent board before putting itself forward as manager." This could lead to a shift in the fund's investment policy towards investing in UK closed-ended funds, she added. Matthew Read, senior analyst at Quoteddata, suggested Saba appears "intent on repeatedly requisitioning [USGT] in the hope that other shareholders eventually tire of the process, allowing it to gain control of the board through a war of attrition."
The current challenge brings renewed focus to USGT's performance. The trust, a FTSE 250 constituent, saw its value drop by more than half in 2022, but has since recovered almost all of that loss, rallying 24 per cent in the past year. Despite being an early investor in companies like SpaceX and Anthropic, its share price is trading below its level five years ago.