Baillie Gifford's Performance Data: A New Chapter in the Activist Spat with Saba Capital

As the activist spat between Baillie Gifford and Saba Capital deepens, fresh performance data from the Scottish asset manager has emerged, painting a picture of underperformance and sparking renewed debate about the future of several investment trusts. With Saba pushing for significant changes, including mergers and liquidity events, the question remains: how will these proposed measures align with Baillie Gifford's long-term investment approach, and what potential risks or benefits do they present?



Baillie Gifford's recent performance data reveals a challenging landscape for the firm, with most of its investment funds underperforming. This underperformance, coupled with extreme volatility and ongoing debates over unlisted companies' valuations, has fueled Saba Capital's push for corrective measures. Saba argues that the trusts have notably underperformed over the past three years and that corrective measures, ranging from 'liquidity events' such as tender offers to more drastic action, could boost performance. Its objective appears to be merging at least some of these funds and using the consolidated vehicle to buy shares in other discounted investment trusts.

However, Baillie Gifford remains committed to its long-term investment approach, which focuses on fundamental research, active engagement, and an ability to ignore short-term market fluctuations. This strategy has served the firm well in the past, but the current economic environment has presented significant challenges. As interest rate peaks approach, there is hope that the bottom could be near, but it could still be a while before Baillie Gifford funds start to outperform again.

Saba Capital's proposed measures, such as liquidity events and mergers, present both potential risks and benefits. While these actions could potentially improve the performance of the underperforming funds in the short term, they may also disrupt Baillie Gifford's long-term investment approach. Mergers and liquidity events can create uncertainty and volatility, which may not be in the best interest of long-term shareholders. Additionally, mergers can be complex and costly, with no guarantee of success.

On the other hand, if successful, these measures could potentially improve the performance of the underperforming funds and create synergies through cost savings and improved efficiency. Shareholders will need to carefully consider these potential impacts when deciding how to vote on Saba Capital's proposals.

In conclusion, the recent performance data from Baillie Gifford has added a new chapter to the ongoing activist spat with Saba Capital. As Saba pushes for significant changes, including mergers and liquidity events, shareholders must weigh the potential risks and benefits of these proposed measures. While these actions could potentially improve short-term performance, they may also disrupt Baillie Gifford's long-term investment approach. Ultimately, the decision lies with the shareholders, who must consider the best interests of the funds and their long-term goals.