EWIT’s portfolio, valued at £847.15 million ($1.1 billion) as of 31 October, invests globally in public and private companies that management believes possess disruptive growth potential. The trust’s largest disclosed holding is Space Exploration Technologies (SpaceX), representing 8.4 percent of assets. Other positions span emerging businesses involved in software, life sciences and advanced manufacturing.
Weinstein maintains that extended underperformance demonstrates the need for board-level change. He claims directors have shown “prolonged inertia” and that shareholders cannot rely on the current leadership to pursue strategic adjustments capable of narrowing the trust’s persistent discount to NAV or improving long-term returns. As a remedy, Saba proposes replacing the entire board with individuals it describes as qualified, independent and focused on creating value for all investors.
The latest initiative follows an unsuccessful attempt by Saba in 2023 to introduce board changes at EWIT. That effort did not gain sufficient backing from other shareholders, but Saba has since increased its stake and intensified its campaign. Speaking last week at the Sohn London Investment Conference, Weinstein said widening discounts across the U.K. investment trust sector signal “a storm brewing,” highlighting what he regards as systemic governance weaknesses. Data compiled by the Association of Investment Companies shows that the average sector discount has expanded markedly since early 2022, reflecting investor concern over rising rates and market volatility. (Association of Investment Companies).
Saba’s broader strategy involves taking sizable positions in closed-end funds that trade at substantial discounts, then pressing for measures such as board refreshment, share buybacks or structural reviews to unlock value. The firm, which oversees roughly $6 billion, is best known for credit relative-value trading but has become increasingly active in corporate governance campaigns, particularly in the United States and the United Kingdom.
Baillie Gifford, the Edinburgh-based asset manager responsible for EWIT’s portfolio selection and day-to-day operations, declined to comment on the activist proposal. EWIT is expected to release a statement later on Thursday addressing the request for a shareholder meeting and outlining its position on board composition.
Under U.K. company law, investors holding at least 5 percent of voting rights can requisition a general meeting. With a roughly 30 percent stake, Saba comfortably meets that threshold, though approval of new directors would still require majority support from other shareholders. The trust’s register includes a mix of institutional asset managers, wealth platforms and retail investors.
If the requisition succeeds, the proposed meeting would be convened within 28 days of notice, giving the current board limited time to rally opposition or propose alternative solutions. Potential options might include a formal review of portfolio strategy, changes to fee arrangements or a tender offer to shrink the discount, but Weinstein’s letter indicates he lacks confidence in the current board’s willingness or ability to pursue such measures effectively.
Market reaction to the development is likely to focus on whether other large shareholders—particularly U.K. wealth managers that traditionally support management—align with the activist. Analysts tracking the sector note that governance challenges at investment trusts have become more prominent as persistent discounts erode investor returns, prompting both activists and boards to explore structural remedies.
Edinburgh Worldwide Investment Trust was launched in 1998 and has been managed by Baillie Gifford since inception. The fund charges an annual management fee based on market capitalization and has the flexibility to invest up to 15 percent of assets in private companies. Its stated objective is to achieve long-term capital growth by backing businesses capable of significant technological disruption.
As stakeholders await EWIT’s formal response, the confrontation underscores rising tension between boards of closed-end funds and shareholders frustrated by underperformance. Whether Weinstein’s renewed effort succeeds may influence broader governance practices across the sector.
Crédito da imagem: CNBC
