Requisitions General Meetings of Shareholders of Seven Investment Trusts Currently Managed by Baillie Gifford, Herald Investment Management, Janus Henderson Investors and Manulife | CQS Investment Management

Intends to Reconstitute the Boards with Experienced Directors Who Will “Mind the Gap” Between the Trusts’ Trading Price and Net Asset Value

Details Plan to Quickly Deliver Substantial Liquidity and Long-Term Returns for All Shareholders

Visit www.mindthegap-uktrusts.com to Sign Up for Important Campaign Updates, Meet Saba’s Director Candidates and Learn How to Support Saba’s Resolutions at the General Meetings

Saba Capital Management, L.P. (together with certain of its affiliates, “Saba” or “we”) today announced that it has requisitioned the Boards of Directors (the “Boards”) of 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”) to convene general meetings of shareholders (the “General Meetings”) to provide shareholders the opportunity to vote on resolutions to remove the Trusts’ existing directors and appoint highly qualified directors to replace them. Saba is convening the General Meetings because we believe the current Boards of Directors and investment managers have failed to perform versus their benchmarks and have, therefore, required Saba’s investment to narrow the deep trading discounts to net asset value and deliver returns for shareholders.

In connection with its requisitions, Saba today issued the following open letter to its fellow shareholders. For more information on the director candidates and Saba’s plans for the Trusts, including its intent that the current investment managers be replaced, visit: www.mindthegap-uktrusts.com.

LEGAL DISCLAIMER: NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

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18 December 2024

Fellow Shareholders,

On behalf of Saba Capital Management, L.P. (together with certain of its affiliates, “Saba” or “we”), I am writing to inform you that we have requested the Boards of Directors (the “Boards”) of seven investment trusts (listed below) convene general meetings (the “General Meetings”). The seven trusts are Baillie Gifford US Growth Trust PLC, CQS Natural Resources Growth & Income PLC, Edinburgh Worldwide Investment Trust PLC, European Smaller Companies Trust PLC, Henderson Opportunities Trust PLC, Herald Investment Trust PLC and Keystone Positive Change Investment Trust PLC (collectively, the “Trusts”). We called these General Meetings because the current Boards have failed to hold the investment managers accountable for the Trusts’ wide trading discounts to net asset value (“NAV”) and their inability to deliver sufficient shareholder returns.

Saba holds an interest in approximately 19% to 29% of each Trust’s shares, making us the largest investor in each Trust, aligning our interests with yours and giving us the right to requisition the General Meetings. We believe that the Boards have not minded the trading gap, which is why we want to offer you the opportunity to elect new directors with a concrete plan to deliver shareholder value.

Saba’s Strong Track Record and Views on the U.K. Investment Trust Industry

Investment trusts first caught my eye as an individual investor more than two decades ago, early in my career at Deutsche Bank. I was drawn to the inconsistency: while some trusts traded near fair value, others were stuck at a yawning discount. This discrepancy fascinated me. I saw an opportunity to apply techniques from my institutional markets experience to a space largely driven by small investors. It was the perfect arena to combine my analytical skills and passion for navigating the odds, whether as an investor, blackjack card counter or chess master.

Today, it’s a core strategy for us at Saba Capital, as we seek to help millions of individual investors realize significant value. What has caught my attention for the past three years is that the U.K. trust industry’s discounts have deepened as a consequence of investors losing faith in managers after shockingly poor performance in certain trusts. At the same time, the boards have not held those managers accountable.

Saba prefers private engagement with the boards of the trusts we invest in, but underperformance, persistent trading discounts and disengaged management teams leave us no choice but to act. The value creation opportunities are vast when trusts are overseen by skilled managers and boards operating with best-in-class governance. This is why we believe change is urgently needed at these Trusts.

As one of the world’s single-largest investors in investment trusts, Saba has a track record of pursuing changes that return discounted trusts to their full NAV and create long-term value for shareholders. We have negotiated dozens of shareholder-friendly corporate actions – such as tenders, share buybacks, restructurings and discount management plans – and changes to investment approaches in investment vehicles where shareholders had previously suffered from prolonged poor performance and subpar management.

With our industry expertise, we have identified a clear path forward to transform these Trusts and deliver greater shareholder value than under the current Boards and respective investment managers, as outlined below.¹

Mind the Gap: Why Saba Believes New Boards Are Necessary to Correct Underperformance

Saba is concerned that the current managers’ and Boards’ inability to mind the gap between each Trust’s trading price and NAV has destroyed significant value for shareholders. It is important to note that the Trusts’ discounts to NAV have narrowed significantly over the last six months. We consider this to be a direct result of Saba building our total stake in these Trusts to £1.5 billion. Without such buyer demand or the prospect of active steps being taken to improve returns to shareholders, there is a risk of the Trusts’ share prices falling and discounts widening again if we are unsuccessful in our pursuit to reconstitute the Boards of the seven Trusts.

As evidenced in the chart below, the Trusts have also delivered underwhelming, and in some cases disastrous, total shareholder returns (“TSR”) compared to their respective benchmark indices during the last three years.^2,3

The takeaway is clear: the Trusts’ managers and their directors have failed shareholders. Performance demonstrates that they have not taken sufficient steps to resolve the Trusts’ structural issues, depriving shareholders of superior returns. While there are multiple levers to narrow these persistent discounts, inaction has been the consistent course of current leadership.

Saba’s Resolutions: Reconstitute the Trusts’ Boards with Exceptionally Qualified Directors

The current Boards’ failure to hold management accountable for the Trusts’ poor performance has left us no choice but to take the extraordinary step of requisitioning a General Meeting for each of the seven Trusts. To swiftly capitalize on the significant upside opportunity for all shareholders, we have requested that each Board conduct its General Meeting as soon as possible and expect that all General Meetings will be scheduled, at the latest, by early February 2025.⁴

At each of these meetings, shareholders will have the opportunity to vote on two critical resolutions (the “Resolutions”) proposed by Saba to 1.) remove all current directors of the Trusts, and 2.) appoint new, highly qualified candidates to replace them.⁵

By fully reconstituting the Trusts’ Boards, we believe that we can unlock greater value for shareholders and address the long-term structural issues that have hamstrung the Trusts’ return potential under current leadership. Each of the director candidates shares a deep commitment to improving shareholder returns and putting your interests above their own.

We have proposed to replace the full Board of each Trust with the director appointees set out in the following table:

The Plan: Deliver Substantial Liquidity & Long-Term Returns for Shareholders

We have identified a clear path forward to transform these seven Trusts and deliver greater value than you could otherwise realize under the current Boards and managers. Our plan is simple: with a reconstituted Board, we intend to provide shareholders with long-overdue liquidity options alongside the opportunity for greater long-term returns under a new investment strategy and manager.

If appointed, the new directors will transparently assess all go-forward options available to the Trusts, including:

• Offering liquidity events, including tender offers and share buybacks, so that all shareholders immediately have the opportunity to receive substantial liquidity near NAV, if they wish.
• Terminating the Trusts’ current investment management agreements.
• Replacing the Trusts’ current investment managers.
• Refocusing the Trusts’ investment mandates on purchasing discounted trusts and/or combining them with other investment trusts, where appropriate, to realize scale benefits and synergies.

The Opportunity: Unlock Value with a Proven Investment Manager

Saba has seen demand from investors to bring a product similar to our CEFS exchange-traded fund, which actively invests in discounted closed-end funds, to the U.K. market. This campaign answers this call.

At each Trust where shareholders pass our Resolutions, the Board will be changed immediately, and each newly appointed Board will consider the optimal investment strategy and manager going forward. If a new Board, in accordance with its fiduciary duties, decides to proceed with replacing the existing manager and introducing a new investment policy, we anticipate the following process:

• The anticipated notice period of three months (EWI, KPC), six months (CYN, ESCT, HOT, USA) and 12 months (HRI) for each investment management agreement will be followed.
• If the Board of a Trust decides to proceed with the termination of any existing investment management agreement, new arrangements will be considered and put in place prior to its expiry.
• We intend to propose Saba as the new investment manager to each of the Boards for their consideration.
• If a Board ultimately decides to vote on the appointment of Saba, Mr. Weinstein and Mr. Kazarian will recuse themselves from voting on Board decisions related to Saba.
• To ensure compliance with the highest standards of governance, it is intended that one or more further independent directors will also be appointed to each Board as soon as reasonably possible following the Trusts’ General Meetings.

If the director candidates are appointed, they intend to first assess options to provide shareholders the opportunity to achieve substantial liquidity near NAV if they do not wish to remain in a Trust with a new investment manager and mandate. If a newly reconstituted Board selects Saba as the new investment manager, we intend to deliver attractive terms and greater value to shareholders by shifting the Trusts’ investment mandates to focus on purchasing discounted trusts consistent with our successful strategy at CEFS, as investors have consistently called for.

Vote “FOR” Saba’s Resolutions at the Upcoming General Meetings

As shareholders, you deserve an investment that provides reliable returns, Boards that advocate for your best interests and managers that are focused on delivering enhanced value.

If you are ready for positive change, then we strongly urge you to vote in favour of the Resolutions as we firmly believe they are the only credible, long-term way to earn outsized returns on your investment. Saba believes that passing all the Resolutions is in the best interests of each Trust and its shareholders. Accordingly, Saba will exercise all our voting rights in favour of each Resolution at the Trusts’ General Meetings.

We look forward to continuing this dialogue with you and appreciate your consideration. We are available to discuss our Resolutions and our campaign to #MindTheGap.

Sincerely,

Boaz Weinstein

Founder & Chief Investment Officer, Saba Capital

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SABA HOLDINGS IN EACH TRUST

As of 18 December 2024, Saba, directly or indirectly, has the following aggregate interest in each of the Trusts (including at least a 5% holding of shares in each Trust):

Saba’s interest in each Trust is currently less than 30% of the issued share capital of each relevant Trust. Although Saba has no current intention to acquire 30% or more of any Trust, following the potential replacement of applicable investment managers, Saba, as a shareholder, intends to explore possible means by which portfolios of the Trusts may be aggregated, where appropriate, to realise scale benefits and synergies.

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White & Case LLP is acting as legal adviser to Saba Capital Management, L.P.

About Saba

Saba Capital Management, L.P. is a global alternative asset management firm that seeks to deliver superior risk-adjusted returns for a diverse group of clients. Founded in 2009 by Boaz Weinstein, Saba is a pioneer of credit relative value strategies and capital structure arbitrage. Saba has offices in New York City and London. Learn more at www.sabacapital.com.

DISCLAIMER

Saba Capital Management, L.P. (“Saba”) is publishing this announcement solely for the information of other shareholders in each of 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) (the “Trusts”). This announcement is not intended to be and does not constitute or contain any investment recommendation as defined by Regulation (EU) No 596/2014 (as it forms part of the domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018). No information in this announcement should be construed as recommending or suggesting an investment strategy. Nothing in this announcement or in any related materials is a statement of or indicates or implies any specific or probable value outcome in any particular circumstance. This announcement is provided merely for general informational purposes and is not intended to be, nor should it be construed as (1) investment, financial, tax or legal advice, or (2) a recommendation to buy, sell or hold any security or other investment, or to pursue any investment style or strategy. Neither the information nor any opinion contained in this announcement constitutes an inducement or offer to purchase or sell or a solicitation of an offer to purchase or sell any securities or other investments in the Trusts or any other trust by Saba or any of its affiliates in any jurisdiction. This announcement does not consider the investment objective, financial situation, suitability or the particular need or circumstances of any specific individual who may access or review this announcement and may not be taken as advice on the merits of any investment decision. This announcement is not intended to provide the sole basis for evaluation of, and does not purport to contain all information that may be required with respect to, any potential investment in the Trusts. Any person who is in any doubt about the matters to which this announcement relates should consult an authorised financial adviser or other person authorised under the UK Financial Services and Markets Act 2000. To the best of Saba’s ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources that Saba believes to be accurate and reliable. However, such information is presented “as is”, without warranty of any kind, whether express or implied, and Saba has not independently verified the data contained therein. All expressions of opinion are subject to change without notice, and Saba does not undertake to update or supplement any of the information, analysis and opinion contained herein.

The reference herein to CEFS (and Saba as its portfolio manager) is solely provided for context in discussing the proposals related to the Trusts and is not intended to be, nor is it, an offer to sell interests of that fund or any other Saba-managed or subadvised vehicle.

Saba may continue transacting in the shares and securities of the Trusts, and/or derivatives referenced to them (which may include those providing long and short economic exposure) for an indefinite period following the date of this announcement and may increase or decrease its interests in such shares, securities and/or derivatives at any time.

FORWARD LOOKING STATEMENTS

This announcement contains certain forward-looking statements and information that are based on Saba’s beliefs, as well as assumptions made by, and information currently available to, Saba. These statements include, but are not limited to, statements about strategies, plans, objectives, expectations, intentions, expenditures and assumptions and other statements that are not historical facts. When used herein, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and “project” and similar expressions (or their negative) are intended to identify forward-looking statements. These statements reflect Saba’s current views with respect to future events, are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual results, performance or achievements may vary materially and adversely from those described herein. There is no assurance or guarantee with respect to the prices at which any securities of the Trusts or any other trust will trade, and such securities may not trade at prices that may be implied herein. Any estimates, projections or potential impact of the opportunities identified by Saba herein are based on assumptions that Saba believes to be reasonable as of the date hereof, but there can be no assurance or guarantee that actual results or performance will not differ, and such differences may be material and adverse. No representation or warranty, express or implied, is given by Saba or any of its officers, employees or agents as to the achievement or reasonableness of, and no reliance should be placed on, any projections, estimates, forecasts, targets, prospects or returns contained herein. Neither Saba nor any of its directors, officers, employees, advisers or representatives shall have any liability whatsoever (for negligence or misrepresentation or in tort or under contract or otherwise) for any loss howsoever arising from any use of information presented in this announcement or otherwise arising in connection with this announcement. Any historical financial information, projections, estimates, forecasts, targets, prospects or returns contained herein are not necessarily a reliable indicator of future performance. Nothing in this announcement should be relied upon as a promise or representation as to the future. Nothing in this announcement should be considered as a profit forecast.

PERMITTED RECIPIENTS

In relation to the United Kingdom, this announcement is being issued only to, and is directed only at, (i) investment professionals specified in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”), (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order and (iii) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities of the Trusts or any member of their respective groups may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “Permitted Recipients”). Persons who are not Permitted Recipients must not act or rely on the information contained in this announcement.

DISTRIBUTION

Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of that jurisdiction. The distribution of this announcement in certain countries may be restricted by law and persons who access it are required to inform themselves and to comply with any such restrictions. Saba disclaims all responsibility where persons access this announcement in breach of any law or regulation in the country of which that person is a citizen or in which that person is residing or is domiciled.

¹ The Trusts’ investment managers include Baillie Gifford, Herald Investment Management, Janus Henderson Investors and Manulife | CQS Investment Management.

² The list of benchmark indices includes S&P 500 Index (USA), MSCI ACWI Index (KPC), S&P Global Small Cap Index (EWI), MSCI World Energy Sector Index (CYN), FTSE All-Share Index (HOT), Russell 2000 Tech Index (HRI) and MSCI Europe ex U.K. Small Cap Index (ESCT).

³ Source: Bloomberg. TSR data is inclusive of dividends and as of 13 December 2024.

⁴ Following receipt of the notice in accordance with applicable law and each Trust’s articles of association.

⁵ For USA, there will be a third resolution to reduce the minimum permitted board size from three to two directors.

⁶ Having consulted with the Takeover Panel, Saba is not aware of other interests or holdings in any Trust of persons considered by the Takeover Panel to be acting in concert with it.

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