Saba Capital’s Boaz Weinstein targets Baillie Gifford-run tech trust
Boaz Weinstein is calling for the removal of the entire board of a tech-focused fund run by Baillie Gifford in a bid to reverse what the activist investor sees as “unprecedented” devaluation.
One letter Speaking to the board of Edinburgh Worldwide Investment Trust on Thursday, Weinstein, whose activist investment firm Saba Capital owns about 30% of the trust’s shares, said the board had “objectively and categorically failed” to deliver the performance shareholders expected.
According to London-listed Baillie Gifford’s website, EWIT’s portfolio consists of a global mix of smaller and emerging public and private companies focused on technological innovation and transformation, targeting “significant disruptive growth potential”.
His assets include Elon Musk’s Space Exploration Technologies, or SpaceX, which accounts for 8.4% of his portfolio.
Weinstein said EWIT’s net asset value had fallen 30.8 percent over the past five years, while its share price return had fallen 35 percent, “far underperforming” his chosen benchmark, the FTSE All-Share Index, which rose 71.4 percent in the same period.
This meant the company’s NAV return and share price performance ultimately lagged the benchmark by more than 100% over the five-year period, Saba said in his letter.
Edinburgh Worldwide Investment Foundation.
“The magnitude of this impairment is unprecedented among peer equity investment trusts in the United Kingdom during this period,” Weinstein wrote.
The foundation’s total assets stood at £847.15 million ($1.1 billion) as of October 31.
Now the high-profile activist investor is calling for an AGM to appoint a new board consisting solely of “qualified, independent directors…committed to delivering long-term value to all shareholders.”
“We are deeply disappointed by the board’s prolonged inertia,” Weinstein wrote in his letter Thursday. “We have no confidence in the current Board’s ability to implement the necessary strategic changes.”
The move follows Saba’s earlier attempt to shake up the board of the EWI foundation last year, which ultimately failed to win investor support.
Weinstein, whose $6 billion New York-based hedge fund trades credit relative value opportunities, has recently built up a series of positions in the U.K. investment trust space.
Outlining two new bets at the annual Sohn London investment conference last week, he said “a storm is brewing” in the UK investment trust sector, where discounts are rising rapidly.
EWIT is expected to release a statement later on Thursday. Baillie Gifford declined to comment.
