Activist investment firm Saba Capital, led by Boaz Weinstein, has achieved a decisive victory in its long-running campaign to remove the board of the Edinburgh Worldwide Investment Trust. The contentious dispute centered on the trust's significant discount to net asset value and its equity position in Elon Musk's SpaceX. The ousted board described the outcome as "disappointing" for shareholders and a warning signal for the entire investment trust industry.
Saba Capital succeeded in a shareholder vote to dismiss trust chairman Jonathan Simpson-Dent and five other directors, while appointing three new directors nominated by Saba. This result grants Weinstein's firm formal control over the Edinburgh Worldwide Investment Trust (EWIT), which is managed by Baillie Gifford. The fund focuses on cutting-edge public and private technology companies and represents a rare opportunity for retail investors to gain indirect exposure to SpaceX.
SpaceX, whose private valuation has surged ahead of a potential IPO, is EWIT's largest holding, accounting for approximately 20% of the portfolio. This holding became a flashpoint in the prolonged boardroom battle, with Weinstein publicly criticizing the board's decision last year to reduce part of the SpaceX stake. Chairman Simpson-Dent noted in a December interview that EWIT had realized a 947% return on its investment in SpaceX since first investing in the then-"speculative" company in 2018.
Weinstein also strongly criticized EWIT's persistent wide discount to NAV, which has since narrowed, describing it in a November letter as an "unprecedented destruction of value." Saba now plans to bid to become EWIT's new fund manager, maintaining its London listing but fundamentally reshaping its investment strategy. In a letter to shareholders, Saba stated the portfolio would be shifted towards UK-listed investment trusts with global mandates, and that an active share buyback program would be implemented to narrow the NAV discount to single digits.
The board, recognizing it lacked the votes to defeat Saba's proposals, conceded defeat early. The final results were confirmed at EWIT's Annual General Meeting. The victory signals a fundamental shift in the trust's shareholder base, with retail and private wealth investors steadily selling their stakes during the conflict, while US institutional capital moved in. EWIT disclosed that four US institutional funds, which collectively hold 40% of the shares, all voted against the board.
The transatlantic tussle featured accusations from both sides of misleading investors. This was Saba's third attempt to overhaul the board, following two previous failures. Ahead of the vote, Chairman Simpson-Dent stated that EWIT's individual and private wealth shareholders had been worn down by the US hedge fund's "repeated baseless attacks," and were replaced by institutional investors attracted by the potential of the SpaceX holding. He declared the outcome a loss for long-term shareholders who would be deprived of a unique tech investment and forced into Saba's strategy of investing in other UK trusts, calling it a "wake-up call" for the industry and regulators.
Saba Capital, which had outlined its post-victory plans earlier in the week, publicly rebutted Simpson-Dent. In a Tuesday statement, Saba asserted that under his leadership, EWIT had ranked last for performance among 66 peers over a five-year period of strong global equity market gains.
According to Danni Hewson, head of financial analysis at investment research firm A.J. Bell, this victory will send shockwaves through the boards of UK investment trusts. Her research indicates Saba holds positions in over 40 similar listed trusts. Hewson stated that if the industry believed it had successfully fended off challenges from activist firm Saba, this news serves as a stark warning. She characterized the investment firm's determination as akin to a "dog that never lets go of its prey."