New York activist hedge fund Saba Capital Management announced it has officially requisitioned the board of directors of the £850 million Edinburgh Worldwide Investment Trust plc (EWIT) to convene a General Meeting of shareholders.
Saba Capital said: “At the meeting, shareholders will vote on resolutions to remove the incumbent Board and appoint three new independent directors with extensive investment experience who are committed to maximising long-term value for all shareholders: Gabi Gliksberg, Michael Joseph and Jassen Trenkow.”
Saba Capital says that “together with certain of its affiliates” it is the “beneficial owner of interests in approximately 30%” of Edinburgh Worldwide.
Saba also published a statement regarding its opposition to EWIT’s proposed merger with Baillie Gifford US Growth Trust plc that was announced on December 2.
“By pushing for a merger that benefits Baillie Gifford rather than shareholders, EWI’s Board has confirmed where its loyalties truly lie,” said the hedge fund. “Shareholders deserve a Board that puts them first — not another cosy deal that entrenches an unaccountable manager.”
Saba Capital said in its letter to shareholders: “As the largest shareholder in Edinburgh Worldwide Investment Trust PLC (EWI:LSE), Saba Capital Management, L.P. (together with certain of its affiliates), a beneficial owner of interests in approximately 30% of the shares, remains profoundly disappointed with EWI’s performance …
“Nearly a year ago, we raised serious concerns that led us to requisition a General Meeting and launch a campaign to reconstitute the Board of Directors. At that time, the incumbent Board urged shareholders to ‘Protect your Trust’ by rejecting our proposals. Many shareholders gave the Board the benefit of the doubt, enabling the directors to remain. The Board’s Chair, Jonathan Simpson-Dent, then acknowledged the need for improvements when he stated: ‘Our job now is to deliver the performance our shareholders rightly expect.’
“Unfortunately, the Board has since failed to take the actions necessary to combat the Company’s years of underperformance. The magnitude of value destruction at EWI over the last five years remains unprecedented among peer UK equity investment trusts over this period.
“For this reason, we have requisitioned another General Meeting, which we expect to be scheduled by early 2026. There, shareholders will be asked to vote on resolutions to remove the incumbent directors and appoint three new qualified, independent directors committed to delivering long-term value.
“We are relaunching this campaign because shareholders deserve a Board that protects capital, addresses persistent underperformance and focuses on long-term value creation with the same intensity seen from other trusts’ boards. This past year, we worked constructively with the boards of six other UK investment trusts to help deliver shareholder-friendly outcomes that allowed thousands of retail investors to exit at or near Net Asset Value (NAV). EWI shareholders deserve that same opportunity …
“EWI needs a Board that will take swift action to change its trajectory. We have therefore nominated three independent directors with extensive investment experience who are committed to maximising long-term value for all shareholders.”
Saba Capital said the nominated individuals are Gabi Gliksberg, Founder & Managing Partner of ATG Capital Management “with 15+ years of investment management experience and prior service as a board member at SafeAuto and the Tortoise Energy Independence Fund”; Michael Joseph, Portfolio Manager & Deputy CIO at Stansberry Asset Management “and author of ‘A Dollar for Fifty Cents: Proven Strategies to Outperform the Market with Closed-End Funds’; and Jassen Trenkow, “a former finance and banking executive with 20+ years of experience, including senior positions at Barclays and Goldman Sachs Asset Management.”
Saba said: “To source these nominees, we intentionally avoided the traditional small UK network of repeat non-executive directors who often sit together on multiple trust boards.
“This entrenched system of familiarity and industry ‘cosiness’ often weakens accountability and contributes to persistent underperformance, double-digit discounts and decisions that protect the interests of managers rather than shareholders.”
Edinburgh Worldwide said: “With respect to the Notice of Requisition, the Board recommends that Shareholders take no action and await a further announcement from the Company that will be made in due course.
Jonathan Simpson-Dent, Chair of Edinburgh Worldwide, said: “Saba has for a second time launched a power grab calling for the entire board to be replaced with US candidates of their own choosing. Their goal is clear – to gain control of the company to prioritise their own commercial interests.
“Saba’s letter does not acknowledge the significant progress EWIT has achieved since this board reset the company on a path for growth a year ago. Since then, NAV total return has been +13.1%, well ahead of the S&P Global Small Cap Index (+5.0%), the company’s benchmark index.
“Furthermore, the Company’s proactive steps over the last year have supported a tightly managed discount, currently 5.4%, significantly narrower than the Global Smaller Companies peer group weighted average discount of 11.0%.
“Shareholders should not be fooled by this US hedge fund’s claims. This board remains fully committed to serving the best interests of all shareholders. Saba’s proposal would result in a board answerable to only one.”