EWIT urges shareholders to reject Boaz Weinstein’s board shake-up plan
Edinburgh Worldwide Investment Trust, a technology-focused fund run by Baillie Gifford, is urging shareholders to implement a plan to overhaul the board of Boaz Weinstein’s activist investment fund Saba Capital.
EWIT’s board said on Wednesday it would “strongly encourage” shareholders to reject a plan by the US hedge fund, which owns a 30% stake in the trust, to remove the incumbent board and replace it with three directors.
In an update on Wednesday, the foundation’s chairman, Jonathan Simpson-Dent, said Saba was an “aggressive US hedge fund” seeking to “seize control for its own business advantage at the expense of other shareholders.”
Simpson-Dent said the trust had made “strong progress” over the past 12 months.
Saba Capital said sweeping changes at board level were required to reverse what it saw as the trust’s “unprecedented depreciation” over the past five years. In a recent letter to shareholders, the firm said the three proposed executives — Gabi Gliksberg, Michael Joseph and Jassen Trenkow — “can deliver the performance our shareholders rightly expect.”
Saba, the largest shareholder, will arrange a General Assembly meeting expected to be held early next year and ask shareholders to vote on resolutions regarding board changes.
Edinburgh Worldwide Investment Foundation.
“We call on Saba to explain to EWIT shareholders its intention beyond replacing the Board, allowing shareholders to make an informed choice in January rather than face significant uncertainty if successful,” Simpson-Dent said.
He highlighted that the trust’s 16.2% NAV total return outperformed the 6% achieved by the benchmark S&P Global Small Cap Index. It also said the share buyback program contributed to an average discount of 5.3% over the last 12 months, which was “significantly narrower” than the peer group average of 17.9%.
Saba’s plan follows an attempt to replace EWIT’s board in February, which investors rejected. Weinstein’s firm has since increased its stake to 30%, allowing it to block a proposed merger between EWIT and US Growth Trust, another Baillie Gifford fund, earlier this month.
‘The storm is approaching’
Relations between the two sides have become increasingly acrimonious amid a protracted row over the reduction of EWIT. Weinstein declared that he had “no confidence” that incumbent executives could improve the outlook and preserve shareholder capital.
“Many shareholders gave the board the benefit of the doubt, allowing the directors to stay,” Saba Capital said. “Simply put, the Board requested more time to make improvements but failed to deliver adequate performance.”
Saba’s founder has focused on closed-end funds and investment trusts on both sides of the Atlantic in recent years, identifying investment opportunities arising from persistent valuation discounts. At the Sohn London investment conference last month, the New York-based fund manager said “a storm is brewing” in the UK investment trust space.
EWIT’s approximately $847 million portfolio consists of a global mix of smaller and emerging public and private companies focused on disruptive technology innovation.
Its largest position is Elon Musk’s SpaceX, which accounts for almost 16% of its total assets.
This position became a major flashpoint in the dispute.
In a post on He had previously stated that Saba received “angry” calls from shareholders during the sale.
EWIT said in a statement Wednesday that it offers investors “a unique and diverse portfolio of disruptive and transformative companies positioned for long-term growth,” which includes SpaceX.
