UK investment manager Baillie Gifford has urged shareholders to fight off a takeover attempt of three of its investment trusts by US hedge fund Saba Capital Management.

Saba is a significant investor in the trusts and wants to replace their current directors with its own two candidates.

Shareholders will vote on the proposals at general meetings scheduled for early February. If 50% of the votes are cast in Saba’s favour, its proposals will pass.

Baillie Gifford has appealed to shareholders to vote against the proposals, accusing Saba of “cherry-picking” data to show poor performance.

James Budden, head of global marketing at Baillie Gifford, said: “Saba cherry-picked data when our style of investing was out of favour to portray a narrative of poor performance and wide discounts. We recognise the past few years have been tough for the companies we invest in; however, performance has notably improved throughout 2024.”

The three investment trusts under attack are the Baillie Gifford US Growth Trust, Edinburgh Worldwide Investment Trust, and Baillie Gifford Keystone Positive Change Investment Trust.

Saba owns 25.2% of the first, 21.1% of the second, and 28.1% of the third. If successful, Saba would intend to assume management of the trusts and would be expected to change each trust's investment mandate, Baillie Gifford said.

It said it had made the public appeal to shareholders to get involved because historically, retail shareholders do not vote at general meetings. That’s often because they invest through platforms and are unaware of how they can exercise their right to vote.

Mr Budden said: “We urge all shareholders to act on this occasion, to clearly understand the choices facing them, and to ensure their voices are heard. Every vote matters.”

Baillie Gifford has managed investment trusts since 1909 and is the largest manager in the sector with a stable of 13 closed-end vehicles.

Saba launched a campaign in December against a total of seven UK trusts attempting to replace their boards due to underperformance and wide share price discounts to underlying assets. The other four trusts under attack are CQS Natural Resources Growth & Income, Henderson Opportunities and European Smaller Companies trust, Herald Investment Trust.