Edinburgh Worldwide investors reject Saba plan to oust board

Shareholders of closed-end investment fund Baillie Gifford have rejected plans by activist investor Boaz Weinstein to oust the board of hedge fund Saba Capital.

At a general meeting called by Saba on Tuesday, 53.2 per cent of the votes cast rejected the plan to sack six Edinburgh Worldwide Investment Trust directors and replace them with three Saba-backed candidates. Overall, 92.7% of all EWIT shares, other than those held by Saba, voted against the proposals.

The decision marks a second defeat in Saba Capital’s long-running and at times bitter campaign against the board. Edinburgh WorldwideA UK fund that invests in cutting-edge public and private technology companies.

The $6 billion New York-based hedge fund company, which increased EWIT’s shares from 25% to 30%, first tried to shake up EWIT’s board in February last year, but ultimately failed to win investor support.

Edinburgh Worldwide Investment Trust Chairman Jonathan Simpson-Dent criticized the activist campaign as a “significant and costly distraction”.

“For the second time in less than a year, Edinburgh Worldwide’s shareholders have voted decisively to reject Saba’s proposal to place his own candidates on the board and the uncertainty this would cause,” Simpson-Dent said in a statement. he said.

“Saba remains our largest shareholder and we will continue to engage constructively with them to develop potential solutions that will enable us to move forward.”

EWIT’s total assets stood at £847.15 million ($1.1 billion) as of October 31.

Weinstein focused heavily on EWIT’s massive discount to its net asset value. While EWIT’s NAV discount has recently narrowed, the US executive highlighted long-term underperformance, which he called “unprecedented depreciation”.

He also focused on Elon Musk’s SpaceX, which is the foundation’s largest holding and accounts for about 8% of its portfolio. In an open letter he wrote earlier this month, Weinstein accused the EWIT board of “misleading” shareholders regarding the sale of SpaceX shares.

Responding on January 7, EWIT said the US hedge fund was engaged in an “aggressive campaign” to “take control of the company to prioritize its own business interests to the detriment of other shareholders”.

CNBC has contacted Saba Capital representatives for comment.

Permanent NAV discounts, common in many investment trusts in the UK, The executive was a linchpin of trading for Weinstein’s firm in recent years, where he believed a “storm” was brewing for shareholders.