Edinburgh Worldwide vs Saba: tale of the tape and how to vote

Investment trust shareholders could be forgiven a sense of deja vu as they enter 2026.

Plenty may have changed for the sector in the last year, from a fresh swathe of mergers to a long-awaited narrowing of discounts. But US activist investor Saba Capital is still active in the space, and has called a meeting aimed at overthrowing the board of Edinburgh Worldwide Ord (LSE:EWI) once again.

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The Baillie-Gifford managed global smaller companies fund was one of the seven trusts originally targeted by Saba around a year ago, and like the other six managed to decisively defeat the activist’s motion to overthrow the board.

If we exclude Saba and their associates, some 98.4% of shareholders who took part in the Edinburgh Worldwide vote in February 2025 opted to keep the current board in seat.

Fast forward to 2026 and Saba is again looking to overthrow the board and install a new set of directors, and there is arguably a greater chance that it could succeed this time round.

With seven trusts targeted last year, the battle attracted plenty of publicity and prompted the launch of a major campaign seeking to mobilise DIY investors to vote their shares.

With just one trust targeted now and investors potentially less motivated to get out and vote, there’s a chance that things could go differently. And with around 30% of voting rights, Saba already has plenty of clout.

Each voting item will require more than 50% of the votes cast to be in favour of the board’s removal in order to pass. Given Saba Capital’s stake, a low voter turnout would hand the activist a greater percentage share of the vote.

Therefore, it is important that retail investors consider having their say. While it is easy to think that as a small shareholder your vote will not make a difference, if increasing numbers of investors engage and use their votes it will result in retail investors having greater influence.

When will the votes take place, and how do I vote?

Interactive investor customers who own shares have until 15 January at 6.59pm to vote. The meeting will take place on 20 January in Edinburgh.

It is a simple and easy process. Interactive investor customers are able to vote via the Voting Mailbox in their online account (under “portfolio” at the top of the page).

Customers have been informed about the vote, with notifications sent through their ii app “voting mailbox” service, informing them when they are eligible to place a vote. Customers have also been sent an email about the upcoming vote.

Saba’s plan: what we know

Face-offs between companies and activists can quickly become confrontational and emotionally charged, with plenty of mudslinging between the different parties.

We saw that when Saba squared up to the original seven trusts a year ago, and this latest battle is no different.

While we won’t dwell on all the claims made, investors can digest these via a lengthy presentation from Saba and a document including arguments from the Edinburgh Worldwide board. Note that a variety of the claims made have been disputed between the two sides.

For now, it’s worth touching on what we know of Saba’s plans, some of the arguments deployed by the different sides, and what shareholders should consider before they vote.

Saba wants to remove the trust’s six current directors and replace them with three individuals.

There’s Gabi Gliksberg, the founder of ATG Capital Management, a firm that mainly invests in listed companies and uses “direct and constructive engagement” in the pursuit of returns.

The other two names Saba wants to be installed are Michael Joseph, deputy chief investment officer at Stansberry Asset Management and author of a book on closed-ended funds, and Jassen Trenkow, a former finance and banking executive who previously held senior positions at Barclays and Goldman Sachs Asset Management.

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As in its original campaign, Saba has not been clear about exactly what would happen, were it to successfully overthrow the current board. Although Saba argues that the plan would be down to the board.

The presentation issued by the activist says the new board would bring “impartial and experienced perspectives” and “constantly explore all avenues to improve share price performance and maximise value”. EWI’s board has questioned the independence of the three prospective directors, given that they have been selected by Saba.

For its part, Saba says its proposed board members are not, and have not been, employed by the activist, argues that they do not come from the “traditional, cosy network of UK non-executive directors”, and that having three directors (versus the two Saba previously proposed) “enhances accountability and enables decisive action”.

Possible outcomes

We don’t know what the directors might do but it would normally be instructive to examine some of Saba’s previous “wins” as a clue to potential options.

As the table shows, the activist has sought to exit its positions at a profit via tender offers or by converting trusts into other fund structures to eradicate the share price discount to net asset value (NAV).

Under a tender offer, a certain percentage of the share capital is made available to investors who wish to sell some of their holding. Tender offers typically offer exits at NAV or close to NAV. Therefore, this provides an exit route for shareholders at a better price. Edinburgh Worldwide’s current discount is -7.1%.

Is this a possibility for Edinburgh Worldwide? The trust has less liquidity than others thanks to its allocation to private companies: these accounted for 22% of the portfolio at the end of October and that figure will likely have risen in December, thanks to an upwards valuation for top holding SpaceX. The presence of private companies makes it harder for the trust to carry out a substantial tender offer.

Offering more incremental exit opportunities via increased share buybacks could be another option.

Saba has previously suggested that it would take over trusts and turn them into a vehicle that invests in other discounted trusts, and at the end of the year it was in the process of setting up an exchange-traded fund (ETF) focused on doing this in the UK.

In theory, Edinburgh Worldwide could be rolled into such a vehicle. But it should be stressed that no definite plan has been outlined so far, leaving us to speculate and shareholders in the dark over the activist investor’s future intentions.

Why would you back, or oppose, Saba?

When deciding whether to stick with any holding, it’s good to ask why you bought it in the first place and whether it still meets that purpose.

Edinburgh Worldwide shareholders may well see it as a route into small-cap growth companies, as well as into unlisted companies including but not limited to SpaceX.

The latter is available via other Baillie Gifford vehicles such as Scottish Mortgage Ord (LSE:SMT) and fellow Saba target Baillie Gifford US Growth Ord (LSE:USA), although a widely anticipated SpaceX initial public offering (IPO) could allow individuals to invest directly in future.

The board of Edinburgh Worldwide makes the case that it “offers a unique and distinctive portfolio of disruptive and transformative companies positioned for long-term growth, including BillionToOne Inc Ordinary Shares - Class A (NASDAQ:BLLN), Echodyne, SHINE Technologies, PsiQuantum, SpaceX (the company’s largest holding), Axon Enterprise Inc (NASDAQ:AXON), and Alnylam Pharmaceuticals Inc (NASDAQ:ALNY).”

It also adds: “The approach of Saba and its associates to this portfolio is unknown.”

Edinburgh Worldwide did have a bad run of performance, which in part relates to the growth investment style that struggled as interest rates went up in 2022. Shareholders lost almost 40% in 2022 and around 11% the following year.

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The trust did tweak its approach in response to this, including a restructuring of the portfolio to focus on a reduced number of holdings, ranging from 60 to 100 versus an old range of between 75 and 125, enabling “more regular and deeper engagement with those companies”.

The trust’s upper limit on holding size was upped to $5 billion, while the trust promised to return up to £130 million to investors in 2025. Saba argues that the latter has not happened, and the trust bought back some £44.6 million of shares in 2025, according to Association of Investment Companies (AIC) data.

While, Edinburgh Worldwide says that its enhanced share buyback programme contributed to an average discount over the last 12 months of -5.5%. The trust’s chair has also argued that the board suggested tender offers to Saba on two occasions in 2025, but was rebuffed.

If we look at performance now, it has certainly improved recently as shown by the table.

Source: Winterflood, 05/01/2026. Figures order by one-year returns. Past performance is not a guide to future performance.

Investors will ultimately have to decide whether they want to opt for Saba’s suggested approach, which could theoretically involve moving into a vehicle focused on discounted trusts, or could involve getting an opportunity to sell out of EWI at closer to NAV than now.

They should also consider whether they expect EWI to ultimately deliver greater returns with its current remit, and whether opting for an overhaul now might see them miss out on a recovery further down the line.

As we’ve noted before one Saba target, CQS Natural Resources G&I Ord (LSE:CYN), ended up staging a pronounced recovery last year.