Saba gains control of Edinburgh Worldwide

Boaz Weinstein, founder of Saba Capital, pictured in New York last month. Photo: Sylvain Gaboury/Patrick McMullan via Getty Images.

US activist Saba has succeeded in overthrowing the board of Edinburgh Worldwide Ord (LSE:EWI), marking the first time it has taken control of a UK investment trust.

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Shareholders did not vote to reappoint the existing board, headed up by Jonathan Simpson-Dent, while some 62.8% of the votes cast were in favour of appointing Saba’s nominees Gabriel Gliksberg, Jassen Trenkow and Michael Joseph as directors.

The plan now is to change investment manager, with Saba having already noted that it would “submit itself for consideration” on this front.

Saba has outlined intentions to use the fund to invest in discounted investment trusts, continuing its strategy of recent years and building an approach that has also seen it launch its own exchange-traded fund (ETF).

Major positions in the ETF currently include Workspace Group (LSE:WKP), UNITE Group (LSE:UTG), Derwent London (LSE:DLN), SDCL Efficiency Income Trust plc. (LSE:SEIT), Pantheon International Ord (LSE:PIN) and HarbourVest Global Priv Equity Ord (LSE:HVPE).

EWI shareholders, meanwhile, get the opportunity to tender their shares and exit at net asset value (NAV) minus costs, or tender in the wake of a SpaceX initial public offering (IPO) or liquidity event but prior to any potential change in the investment mandate, again at NAV minus costs.

SpaceX has become a big part of the debate around the trust, given that it represented around a fifth of the portfolio at the end of March. Baillie Gifford stablemate Scottish Mortgage Ord (LSE:SMT) has a similar exposure to the company.

• SpaceX: trusts to gravitate towards for exposure
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Ground down

The vote marks the end of a long battle that saw EWI shareholders twice vote to stick with the existing board.

However, Saba appears to have ground the trust down, with some of the original shareholders exiting and EWI noting ahead of today’s vote that “a further US investment fund with a material holding” had voted against the existing board.

In a market announcement released ahead of the vote, Simpson-Dent predicted that the incumbent board would lose the vote, adding: “This is a disappointing day for our long-standing shareholders who are set to lose exposure to this exciting mandate focused on next-generation technology, seemingly in favour of Saba’s plan to invest in other UK investment trusts.

“Retail and private wealth shareholders have been ground down by Saba’s repeated attacks. A significant number have already chosen to exit the company, replaced by institutions seeking to capture the upside potential in EWI’s substantial SpaceX exposure.

Source: Winterflood. Based on latest Saba disclosures.

He also described Saba’s triumph as a “wake-up call for investment trusts”.

It seems likely it could also take over the £820 million Impax Environmental Markets Ord (LSE:IEM) trust, with Saba announcing that it had a stake of some 29.9% in the trust in the wake of a tender offer. Saba has also looked likely to take over the £1.3 billion Herald Ord (LSE:HRI).

The activist has been a controversial presence in the investment trust sector ever since launching a campaign to overthrow the boards at seven trusts back in December 2024.

While some investors have lamented the fact that the activist is removing some distinctive funds from existence in the face of shareholder resistance, Saba has also helped to drive plenty of activity from boards and investment managers, from fee cuts and share buybacks to mergers.