US hedge fund Saba Capital is targeting a so-called ‘miserable seven’ investment trusts with plans to oust their directors and install allies in their place.

The firm, run by Wall Street financier Boaz Weinstein, needs to win 50 per cent support from voting shareholders to succeed, meaning investors must vote against the proposals to defeat them.

The investment trusts have fought back and are urging investors not to miss the chance to vote and have their say. 

Here we take a look at each of the seven trusts.

Herald Investment Trust

Herald is the largest investment trust being targeted by Saba with a market value of nearly £1.3billion.

It is the first one to hold a vote on the US hedge fund’s plans, with a meeting scheduled for Wednesday.

The trust’s top holdings include major tech firms such as US computer server maker Super Micro and Dutch chip group BE Semiconductor, as well as London-listed firms YouGov and Next Fifteen.

Saba has told Herald’s investors that if it wins next week, it will urge the new board to offer shareholders the chance to cash out at 99pc of the trust’s net asset value (NAV).

However, the board has accused Saba of making an ‘opportunistic’ bid to take control, adding that they believe the US firm has ‘materially underperformed Herald’.

Chairman Andrew Joy said: ‘Every shareholder’s voice matters and every vote counts. Protect your investment from changes to our strategy which provides proven long-term value to shareholders, and vote against Saba’s proposals.’

Baillie Gifford US Growth

The Baillie Gifford US Growth Trust, another mid-cap investment company, holds its vote on February 3. The fund holds assets worth nearly £840million, but its market capitalisation currently sits at £761million.

As the name suggests, the trust focuses on US-based businesses, with its top investment being Elon Musk’s rocket firm SpaceX. Tech giants Amazon, Nvidia and Meta are among its biggest holdings.

After the launch of Saba’s campaign, the trust said it had ‘delivered exactly what it promised’ and accused the fund of trying to ‘subvert’ its performance.

But US Growth’s chairman Tom Burnet said many small shareholders think ‘their votes don’t count’ despite their influence on the trust’s register, controlling about 30pc.

Weinstein has doled out sharp criticism of Baillie Gifford, which manages the trust, saying it was responsible for some of the ‘most abysmal failures’ in the sector.

Keystone Positive Change Investment

Keystone holds £169million of assets and focuses on firms that make a ‘positive social or environmental impact’.

Its top holdings include Taiwanese computer chip giant TSMC, Microsoft, e-commerce group Shopify and language-learning app Duolingo. It trades on the stock market with a value of £146million.

Keystone’s chairman Karen Brade has been among the harshest critics of Saba, saying she has been ‘appalled’ by the US firm’s actions and that it is being ‘disingenuous’ about its plans for the business.

Brade also told the Mail Saba was ‘taking advantage’ of low turnout by retail shareholders at previous votes and it was ‘really important’ small investors made their voices heard at its meeting, also on February 3.

Saba has responded in similarly sulphurous terms, accusing Brade of presiding over a ‘disastrous track record’ at the trust, which currently trades with a discount of 7.3pc to its NAV.

CQS Natural Resources Growth & Income

With assets of £147million, CQS is one of the smaller trusts in Saba’s crosshairs. It trades with a market cap of £118million.

The portfolio focuses on mining, with its top holding Canadian uranium miner NexGen Energy. Other investments include London-listed digger Greatland Gold.

CQS chairman Christopher Casey said the trust’s small investors, who hold 44 per cent of its stock, ‘should understand the importance of their vote’.

Warning that it was ‘no coincidence’ the US firm had targeted trusts with large numbers of retail – or individual – shareholders, he added: ‘They are trying to bulldoze their way in.’

Saba has accused Casey and CQS of making ‘inaccurate, unsubstantiated claims’ about its performance and that the current management’s record was putting shareholder value ‘at risk’.

Henderson Opportunities

Focused on building a portfolio ‘primarily’ of UK investments, the Henderson Opportunities Trust counts banking giants HSBC and Standard Chartered as its top holdings, with substantial investments in Barclays, Tesco and miner Rio Tinto.

The firm’s assets amount to £102million, but it trades on the market at £87million.

Chairman Wendy Colquhoun said Saba’s coup attempt was ‘a really unfortunate turn of events’.

‘It is incredibly important that all of our shareholders vote,’ she said. About 40 per cent of the trust’s shares are held by retail investors.

Saba has claimed that the trust has a track record of underperforming.

This week, the boss of Janus Henderson, which manages the trust, told investors to ‘not be complacent’ about the US firm’s plans.

European Smaller Companies

As its name suggest, the ESCT portfolio is comprised of small and medium-sized companies listed on the Continent.

Its top holdings include Dutch investment manager Van Lanschot Kempen and German chemicals firm AlzChem.

The FTSE 250 firm’s assets are worth £838million while its market cap sits at £719million. About 35 per cent of its shares are held by retail investors.

ESCT chairman James Williams warned investors that, if they did not vote, the hedge fund could change the trust’s investment focus away from what they originally backed.

ESCT has been accused by Saba of having ‘failed shareholders’ and with Henderson Opportunities of presiding over ‘disappointing’ trading over the past three years.

Edinburgh Worldwide Investment

With assets of £812million, the trust offers investors a portfolio of what it describes as businesses operating at ‘frontiers of technological innovation and transformation’.

SpaceX is a top holding with Californian quantum computing firm PsiQuantum and Massachusetts-based drug group AInylam Pharma. It trades with a market cap of £725million and a premium of nearly 0.5 per cent.

Chairman Jonathan Simpson-Dent has been heavily critical of Saba, accusing Weinstein and his allies of trying to ‘make a quick buck’ by taking over the trusts, branding the US firm’s plans as ‘sketchy’.

‘We think his proposals are damaging to shareholders’ interests and choice, which is why we will be urging them to vote against Saba,’ he added.

The critique seems to have hit a nerve with Weinstein, who in a presentation on Tuesday issued a scathing critique of the trust, arguing he ‘couldn’t do worse’ than the trust’s current team.