Baillie Gifford’s £800 million Edinburgh Worldwide Investment Trust — one of the seven investment trust companies currently under attack from New York activist hedge fund Saba Capital Management — said on Monday the year to October 31, 2024, saw “the long-awaited start” of the fund’s “recovery.”
Edinburgh Worldwide’s share price rose 26.1% in the 12 months, with the company’s net asset value (NAV) per share growing 12.8% and the the fund’s “discount” narrowing from 17.4% to 7.6% over the period.
The fund’s comparative index, the S&P Global Small Cap Index, rose 21.6% in sterling terms during this year.
“This upward momentum has continued and accelerated through to the end of the calendar year with a further 23.6% increase in our share price and 13.3% in our NAV between 31 October and 31 December 2024, when the S&P Global Small Cap Index rose by 2.5%,” wrote the fund’s chair Jonathan Simpson-Dent.
Edinburgh Worldwide is managed by Douglas Brodie, Svetlana Viteva and Luke Ward.
Edinburgh Worldwide’s biggest investments during the year to October 31 included: Space Exploration Technologies; commercial quantum computing developer PsiQuantum; Alnylam Pharmaceuticals; unmanned aircraft and tactical missile firm AeroVironment; US online real estate portal Zillow; novel DNA sequencing technology firm Oxford Nanopore Technologies; law enforcement equipment and software provider Axon Enterprise; American Superconductor; Ocado; and electronic bond trading platform MarketAxess.
Also on Monday, Edinburgh Worldwide told shareholders that “Saba’s proposals represent an existential threat to the Edinburgh Worldwide that you have invested in.”
Saba Capital Management requisitioned the boards of the seven investment trusts “to convene general meetings of shareholders to provide shareholders the opportunity to vote on resolutions to remove the Trusts’ existing directors” and appoint “highly qualified directors” to replace them.
Three of the seven funds are managed by Edinburgh-based Baillie Gifford.
The funds being targeted are: Baillie Gifford US Growth Trust, Baillie Gifford’s Edinburgh Worldwide Investment Trust, Baillie Gifford’s Keystone Positive Change Investment Trust, European Smaller Companies Trust, CQS Natural Resources Growth & Income, Henderson Opportunities Trust and Herald Investment Trust.
Edinburgh Worldwide has published notices for both its Annual General Meeting and a Requisitioned General Meeting to be held on February 14. It has urged shareholders to vote against all of the Saba resolutions.
On its results for the year to October 31, 2024, Edinburgh Worldwide said: “Among the top contributors to performance over the year were: Alnylam Pharmaceuticals, a drug developer focused on harnessing gene silencing technology; and AeroVironment, a defence contractor headquartered in the USA, that designs and manufactures unmanned aerial vehicles.
“Over the course of the financial year, the company bought back 14,667,733 shares for treasury, representing approximately 4% of the company’s issued share capital at 31 October 2023.
“Invested equity gearing stood at +11% of shareholders’ funds at the financial year end (2023 – 14%).
“As at the year end, the company held fourteen private companies accounting for 25.3% of total assets (2023 – 26.2% of total assets in fourteen companies). No new private company investments were made during the year.
“The board maintains its conviction that the company’s proposition is unique, compelling and relevant, offering investors access to potentially outsized returns from emerging companies operating at frontiers of scientific, technological and process innovation.”
Edinburgh Worldwide also announced the appointment of Gregory Eckersley as an independent non-executive director of the company, with effect from February 15, 2025.
The company said: “Gregory is an experienced equity investor with a professional executive career in a mix of leadership and asset management roles. Having begun his investment career at Cigna International Investment Limited, he gained international experience at Draycott Partners, Alliance Capital and AllianceBernstein, managing and overseeing teams investing in emerging market and global portfolios and, until 2019, was the Global Head of Internal Equities at the Abu Dhabi Investment Authority. Gregory is a non-executive director of Murray International Trust PLC.”