The Association of Investment Companies (AIC) has written to investment platforms urging them to notify their customers of upcoming votes on Saba Capital Management’s proposed investment trust changes.

The US hedge fund firm has requisitioned general meetings at seven investment trusts and proposed alterations that would “fundamentally change” these trusts.

In response, the AIC has called on platforms to make investors who hold shares in these trusts aware of the upcoming meetings and encourage them to vote on Saba’s proposals.

The votes will be held over the next three weeks, and voting can often be done online in advance of the general meeting.

The seven trusts affected are: Baillie Gifford US Growth, CQS Natural Resources Growth & Income, Edinburgh Worldwide, The European Smaller Companies Trust, Henderson Opportunities Trust, Herald Investment Trust, and Keystone Positive Change.

“Saba is proposing major changes to these seven investment trusts so it’s essential that platforms notify their customers about these meetings swiftly and encourage them to vote,” said AIC chief executive, Richard Stone.

“This is underlined by the Consumer Duty, which requires platforms to help their customers make informed decisions about their investments by ensuring they have the information they need at the right time, in a way they can understand.”

Initially, Saba has proposed replacing the current independent boards with just two new directors and has stated its intention to follow this with a replacement of the investment manager and a new investment mandate, Stone explained.

This could lead to a change in asset exposure, investment risk, and return profile of the companies, which Stone said could move them away from the original choice made by investors.

“Investors need to understand the details of what is being proposed by Saba, including changes to the trusts’ boards, strategy, manager or fees,” Stone continued.

“They need to consider whether the investment trust would still meet their needs, as well as any potential tax implications.

“We provide information on our website for investors who hold investment trusts on platforms on how to vote their shares and attend meetings.

“It’s vital that shareholders vote on the future of their investment trust. The final decision rests with them. They can also take the opportunity to attend the general meetings and ask questions.”

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