Why Britain should slam the door on this US hedge fund raider: RUTH SUNDERLAND

The battle for control of the Baillie Gifford US Growth fund is far bigger than the fate of a single investment trust.

In fact, the entire £270bn investment trust industry, which has been a wonderful feature of the London stock market since the 1860s, is at stake here.

If US predator Boaz Weinstein, who has been terrorising the sector for two years, succeeds in installing three directors at the third attempt, it will not be just another boardroom coup.

Weinstein’s raids, conducted through his investment vehicle Saba, rely on the ability to game the system to usurp power over investment trusts and the assets they hold for savers.

As such, they are an assault on the integrity of UK markets at a time when the country desperately needs them to be firing up.

Boaz Weinstein threatens to hijack Britain’s investment trust industry, says Ruth Sunderland

The future of BG US Growth, which invests in the likes of AI company Anthropic and payments business Stripe, will be decided at a shareholder meeting on October 23.

Britain is shuffling dejectedly towards a Budget a few days later. The best we can hope for is that the Labour Chancellor refrains from even more tax increases.

The only way out of the doom loop of tax and debt is growth. For that we need the City to get its groove back.

The Government, like its Tory predecessors, wants to encourage more growth companies to list here and to persuade more private savers into shares.

All of this depends on confidence that markets are well-regulated and that private investors’ legitimate interests are being protected. But Saba’s antics demonstrate the opposite. Weinstein has exploited loopholes to commandeer trusts without having to pay a takeover premium.

The technique is to defenestrate existing board members and install his own Trojan Horse directors in their place, thereby clearing a path to hand lucrative investment management contracts to Saba.

Investors can of course vote against Saba. They have done, repeatedly, at trusts including BG US Growth.

Weinstein’s response is to try again, and again, and again, until he achieves the result he wants. This is unlikely to be a true reflection of investors’ wishes, however.

Trusts tend to have large numbers of private savers, many of whom hold their shares on platforms which don’t make voting easy.

After a few rounds, inertia sets in and Weinstein can win by dint of sheer attrition.

I’ve asked senior investment trust figures what would make him go away, and none has an answer.

Eventually his life will be made harder. Platforms are doing more to help private investors. Digitisation of shares means voting should, within a few years, be as easy as a single tap on a smartphone.

City regulator the Financial Conduct Authority (FCA) is conducting a review. This will take time. Remarks from a senior FCA official about being disinclined to interfere in the ‘rough and tumble’ of the City have already disappointed trust chiefs.

So far, Weinstein has run rings round the regulator, making it look naive and impotent.

The threads of this can seem like a cat’s cradle, but what it amounts to is simple.

A US hedge fund kingpin is hijacking British investment trusts against the interests of private shareholders, the City and the country as a whole.

I urge shareholders in BG US Growth to use their vote. Deadlines on some platforms come as soon as October 14.

We need to slam the door on Saba before more damage is done.