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Saba Capital Shares Key Facts Demonstrating the Need for Shareholder-Driven Change at Seven U.K. Trusts
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Read the Truth About Saba’s Track Record, Objectives, Nominees and Plan to Deliver Substantial Liquidity and Long-Term Returns for All Shareholders

Register for Webinar on 14 January at 1PM GMT Where Saba Founder & CIO Boaz Weinstein Will Detail Plan to Deliver Shareholder Value at All Seven Trusts and Answer Questions from the Audience: www.bit.ly/saba-uk-webinar

Visit www.mindthegap-uktrusts.com to Learn How to Vote FOR Saba’s Resolutions at Each Trust

NEW YORK, January 13, 2025--(BUSINESS WIRE)--Saba Capital Management, L.P. (together with certain of its affiliates, "Saba" or "we"), today addressed the misleading claims made recently by Baillie Gifford US Growth Trust PLC (USA:LSE), CQS Natural Resources Growth & Income PLC (CYN:LSE), Edinburgh Worldwide Investment Trust PLC (EWI:LSE), European Smaller Companies Trust PLC (ESCT:LSE), Henderson Opportunities Trust PLC (HOT:LSE), Herald Investment Trust PLC (HRI:LSE) and Keystone Positive Change Investment Trust PLC (KPC:LSE) (collectively, the "Trusts") with key facts that reinforce the need for shareholder-driven change.

As a reminder, Saba has requisitioned General Meetings of these seven Trusts to provide shareholders the opportunity to vote on resolutions to remove the Trusts’ existing directors and appoint highly qualified directors to replace them.1 Saba is convening the General Meetings because we believe the current Boards of Directors (the "Boards") and investment managers have failed to perform versus their benchmarks, resulting in deep trading discounts to net asset value ("NAV"), which we believe have only recently narrowed as a result of Saba’s investment.

Saba Founder and CIO Boaz Weinstein will be hosting a live webinar on Tuesday, 14 January at 1:00 p.m. GMT to explain why the Boards must be replaced immediately, outline Saba’s strategy to deliver substantial liquidity and long-term returns for all shareholders and take questions from the audience. To access the webinar, visit: www.bit.ly/saba-uk-webinar.

Misleading Claims from the Trusts Regarding Saba’s Campaign

The Facts

"Saba’s motives are self-serving and will not benefit all shareholders."

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  • As the largest investor in each Trust, our interests are directly aligned with those of all shareholders.

  • We have a proven track record of pursuing changes that return discounted funds to their full NAV and create long-term value for all shareholders.

  • If Saba were selected as manager, our strategy of buying undervalued trusts would accrue to the benefit of the very industry (and shareholders) that managers are claiming we would hurt.

"Saba wishes to take control of your Company for its own economic benefit rather than due to concerns about the Company's performance."

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  • Saba’s investment and engagement in the U.K. investment trust industry is already driving positive results for shareholders.

  • The Trusts’ discounts to NAV have narrowed significantly over the last six months, which we believe is due to Saba’s buying.

  • Only after direct pressure from Saba and through growing our holdings have the majority of the Trusts taken shareholder-friendly actions – including offering full cash exits, increased buybacks and tender offers.

"Saba has not offered a plan for the benefit of all Shareholders."

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  • As disclosed in our 18 December letter, Saba’s plan is simple: with a reconstituted Board, we intend to provide shareholders with liquidity options plus the opportunity for greater long-term returns under a new investment strategy and manager.

  • For HRI shareholders, Saba announced its intent to encourage the new Board to offer a full cash exit at 99% of NAV if shareholders support Saba’s resolutions to reconstitute the HRI Board.

"Saba brings uncertainty and risk."

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  • We’re giving shareholders the chance to get out of an underperforming Trust if they so desire. If they want to remain invested, we’re providing shareholders with the opportunity to profit from this sector rather than be a casualty of it.

  • If Saba is selected as manager, our plan is to offer a U.K.-listed product that will mainly buy trusts at discounts and encourage management to take action, so investors can profit.

  • We intend to use the same proven investment process as the Saba Capital Closed-End Funds ETF ("CEFS"), which invests in discounted U.S. closed-end funds, to the extent shareholders agree. Material changes to the investment policy would require the approval of the relevant Trust’s shareholders.

"Saba wants to appoint a non-independent board."

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  • Saba has put forth independent director candidates across the seven Trusts. All nominees other than Paul Kazarian and Boaz Weinstein are independent from Saba, meaning half of the Board of each Trust will be independent if our proposed resolutions are passed.

  • To ensure compliance with the highest standards of governance, our nominees intend to add one or more additional independent directors to each Board as soon as reasonably possible following the Trusts’ General Meetings.

"The new Board would not meet the standards of both the UK Corporate Governance Code and AIC Code of Corporate Governance."

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  • If Saba’s nominees are elected, the Board of each Trust will be legally compliant at all times under the FCA Listing Rules and will ensure compliance with the highest standards of governance.

  • Following the General Meetings, each Board will comply with the AIC Code of Corporate Governance as soon as practicable, as the nominees intend to appoint one or more additional independent directors with suitable experience.

"We believe Saba’s plan […] may introduce substantially inflated fees."

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  • This is a fear-mongering tactic being peddled by numerous managers to distract from poor performance.

  • Saba’s U.K. investment trust strategy – like its closed-end fund strategy in the U.S. – is anchored in protecting shareholder rights by:

    • Pursuing changes that return discounted trusts to their full NAV.

    • Creating long-term value for shareholders through low fees and better management.

  • Saba maintains a highly competitive 1.1% management fee for CEFS. The fund has experienced substantial demand from investors, allowing it to issue new shares every year since its 2017 launch.2

Misleading Claims from Herald

The Facts

"Since launch in 1994, Herald Investment Trust's investment strategy has delivered outstanding investment performance."

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  • HRI significantly underperformed its benchmark this past year and the past three years, despite beginning 2024 with its largest position in Super Micro Computer – a company that experienced a huge surge, rising more than 300%.3

  • This underperformance is attributed to Katie Potts’s mismanagement of both the Super Micro Computer position and the overall portfolio.

"The Board reiterates its belief that, since Saba started investing in 2009, it has materially underperformed Herald."

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  • This is a complete fabrication: Saba’s public funds did not start investing in 2009. Saba’s CEFS inception was in 2017, and Saba only became the manager of its two closed-end funds in 2023 and 2021. There is no way to compare performance to HRI since 2009.

  • In stark contrast to CEFS delivering a 46.0% gain over the last three years, HRI posted a 9.7% NAV loss.4

"If Saba gains control […] significant value could be lost for Shareholders as a result of forced selling of parts of [HRI’s] Portfolio."

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  • Given our 25.5% ownership of HRI (compared to the current Board holding under 0.05%), it is illogical to suggest that Saba would favour a fire sale that undervalues the very assets in which we are the single largest shareholder.

Misleading Claims from Baillie Gifford

The Facts

"The Keystone board accepts that the company has been through a challenging period of performance against a difficult backdrop and has already taken steps to address this and provide certainty and options for all shareholders […]"

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  • Since Baillie Gifford took over KPC four years ago, performance has been abysmal. The Board’s own benchmark is up 38.3%, while KPC’s NAV return is at -26.1%.5

  • KPC Chair Karen Brade has overseen cumulative underperformance of nearly 130% since assuming her role in 2018 – a staggering loss and destruction of wealth for retail holders and retirees.6

"[USA] is successfully delivering on its investment mandate, with strong long-term performance, and it provides Shareholders with access to leading private companies of this generation, such as SpaceX, Databricks and Stripe, at low cost."

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  • We consider Saba’s buying to be the key driver of today’s premium at USA. Without our buying, USA (and EWI) would continue to trade at discounts – just like they did previously.

  • Baillie Gifford’s Scottish Mortgage Investment Trust (SMT:LSE) and Schiehallion Fund (MNTN:LSE) have similar positions in private companies like SpaceX, yet they trade at double-digit discounts.

Misleading Claims from Janus Henderson

The Facts

"ESCT is a well-managed investment company whose strategy has delivered long-term outperformance for you."

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  • Over the last three years, Janus Henderson’s ESCT and HOT have both traded at a disappointing ~-13.5% average discount to NAV.7

  • These respective double-digit discounts demonstrate that the Trusts’ Boards and portfolio managers have failed shareholders.

"The Board of HOT is offering you a full cash exit at NAV and/or the option to rollover into an open-ended vehicle managed by Janus Henderson Investors. These opportunities are at risk of being cancelled by Saba."

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  • This scheme is simply a last-ditch attempt to protect the underperforming Board, continue lining the manager’s own pockets with shareholder capital and distract from an indefensible track record.

  • We believe Janus Henderson’s proposed reconstruction scheme for HOT is inferior to our nominees’ plan, which will deliver substantial liquidity and long-term returns.

Misleading Claims from Manulife | CQS

The Facts

"Your Board has overseen strong performance."

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  • CYN Chair Christopher Casey cannot hide from poor performance. At CYN, he "delivered" a -14% discount for shareholders and -30% underperformance versus its benchmark over the past three years.8

Six of the seven Trusts have scheduled their Requisitioned General Meetings:

HRI: 22 January 2025 at 12p.m. GMT
USA: 3 February 2025 at 12p.m. GMT
KPC: 3 February 2025 at 12p.m. GMT
CYN: 4 February 2025 at 11a.m. GMT
HOT: 4 February 2025 at 10a.m. GMT
ESCT: 5 February 2025 at 12:30p.m. GMT

Note: The voting deadlines for each Trust will be earlier than the dates of the General Meetings.

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