Herald (HRI ) has passed its continuation vote and defeated activist Saba Capital, which is believed to have voted in favour of a wind-down, for the second time this year.

The £1bn small-cap technology trust had urged shareholders to come out in force against Saba’s plans to liquidate the fund, fearing the New York-based activist could win its campaign via the back door after its failed requisition to replace the entire board.

Investors once again acted to save the fund, with a turnout of 69.1%. Just over 65% of non-Saba shareholders voted, which the board noted was ‘a high percentage by historic standards of continuation votes at Herald or indeed other investment trusts’.

Among those voting, 65.3% of investors voted in favour of the fund continuing. When the effect of Saba’s around 29% stake in the trust was stripped out, 99.9% of non-Saba votes were cast in favour of continuation, according to estimates by Herald’s board.

Unsurprisingly, Saba also appeared to vote against the directors’ remuneration and against the re-election of the board, which it previously sought to oust and replace with its own nominees on the way to installing itself as investment manager.

Chair Andrew Joy said he was ‘pleased that shareholders have again made clear that they wish Herald to continue in its current format’.

‘Only 0.05% of votes were cast with Saba on the continuation vote... With the recent volatility in public markets and in particular tech stocks, the manager is starting to see some real opportunities for a specialist active manager like Herald,’ he said. 

Herald holds a regular continuation vote at its annual general meeting every three years. Before the vote, analysts had said there were concerns that shareholders might not turn out in the same force after a higher-profile vote in January to block Saba. 

It remains unclear how New York-based Saba will now engineer an exit from Herald, or vice versa. 

The trust, which is managed by Katie Potts, was one of seven targeted by Boaz Weinstein-led Saba, which requisitioned meetings to replace the boards. All of the seven trust – which also included Edinburgh Worldwide (EWI ), European Smaller Companies (ESCT ), CQS Natural Resources Growth & Income (CYN ), Henderson Opportunities (HOT ), Baillie Gifford US Growth (USA ), and Keystone Positive Change (KPC ) – defeated Saba as they rallied shareholders to vote against a change of manager and mandate.

Saba had targeted trusts on wide discounts that it said had failed to deliver returns for shareholders. Herald is currently trading at an 11% discount as its smaller company focus has struggled to keep pace with the mega-cap tech boom.

The net asset value (NAV) has fallen 3.8% over the past year, and 0.3% over three years, versus a 7.5% and 50.8% respective rise in the Dow Jones World Technology index (which the trust does not use as a benchmark). 

Herald shares have fallen 2.1% over one year and are up just 8.1% over three years, according to Deutsche Numis data.