Working in finance, I frequently hear the quote, widely attributed to Mark Twain, that “History doesn’t repeat itself, but it often rhymes”. With the new year fast approaching, I am getting a sense of déjà vu as, once again Saba Capital is back launching a campaign that, on the face of it, appears to be another landgrab within the investment trust space.
This time around, the company in the New York-based hedge fund’s sights is Baillie Gifford’s Edinburgh Worldwide (EWI) and, if some of you are already getting a familiar feeling, this may be because EWI was one of Saba’s targets when it launched its campaign against its so-called ‘miserable seven’ late last December. To recap, Saba attempted to seize control of seven investment trusts simultaneously by requisitioning meetings to consider proposals to remove all of their existing board members and replace them entirely with directors of Saba’s choosing.
A clean-sweep of losses for Saba ensued
At the time of its first onslaught against the sector, we took a detailed look at Saba’s proposals for each of the investment trusts it was targeting. Saba’s proposals were effectively a copy-paste for each – in itself quite surprising given that they were all quite different mandates; and it was not hard to come to the same conclusion for all: Saba’s proposals were only in its best interests and were significantly detrimental to its fellow shareholders.
We therefore encouraged shareholders to get themselves informed about Saba’s proposals and suggested that they should vote against them to protect their investments. You will find many articles on our website on this subject. In the event, non-Saba shareholders in all seven funds agreed with our view and voted down Saba’s proposals by incredible margins; in EWI’s case, 98.4% of non-Saba shareholders voted against its proposals. It certainly appeared that Saba’s seven were not as miserable as it had claimed!
Lessons to be learned
There is one thing that we have consistently agreed on with Saba: that there is incredible value to be found in many parts of the investment companies sector – the real mystery to us is that more investors have not recognised this. However, while some of the funds that Saba targeted had challenges – a number were cyclically depressed for example – our view has always been that its approach was fundamentally flawed. For one, if Saba wanted control of these funds, it should have been up front and made bids for them, rather than trying to gain control through the back door. We therefore hoped that, following the very public failure of its campaign, Saba would go away, learn from its mistakes, and come back with a new approach that treats its fellow shareholders fairly.
So, is this true for the proposals being put forward by Saba at the EWI EGM set for 20 January 2026?
Have Saba’s proposals changed?
Depressingly, Saba’s attack bears a strong resemblance to its approach last Christmas. Once again, it wants to remove all six of EWI’s current board and to install an entirely new bench of directors that it has selected.
The main difference seems to be that, rather than proposing a replacement board of just two – which was widely derided as being totally inadequate for some quite sizeable investment trusts – it has increased this to three. They have been named as Gabi Gliksberg, founder and managing partner for ATG Capital Management, Michael Joseph, portfolio manager and deputy CIO at Stansberry Asset Management, and Jassen Trenkow, a former executive at Barclays and Goldman Sachs.
Do Saba’s latest proposals still raise concerns?
We see little evidence to suggest a wholesale change of the board is required. Numerous shareholder-friendly measures have been put in place by the existing board, performance has improved, and the discount has narrowed.
We also have concerns about the proposed directors. First, we do not believe that a board of three is sufficient to provide the necessary oversight of a fund of EWI’s size. Second, all three of Saba’s nominees are US based and, regrettably, are distinctly lacking in both UK market and, specifically, UK investment trust experience. Third, despite Saba’s claims of the independence of its chosen directors, it is hard to believe it would have selected these individuals unless it felt that they would do its bidding.
All of these concerns are significant red flags in our view. We find ourselves agreeing with EWI’s board’s assessment that Saba’s nominees are not independent and endorsing their appointment would effectively hand complete control of EWI to Saba.
Has Saba’s ultimate intention for EWI changed?
While Saba has said nothing of its intentions for EWI should it be successful in taking control of EWI’s board, it has previously stated its intention to appoint itself as EWI’s investment manager and turn EWI from a global small cap trust that has historically been the most growth-focused of its peers by some margin into a fund targeting investment trusts trading on significant discounts.
As we said during Saba’s last campaign, this is a hugely different approach to what EWI currently offers and that shareholders bought EWI for.
We think this attempt to expand its assets under management was a significant factor in the depth of Saba’s defeat last time around and that, if Saba’s plans for EWI had changed, it would be making this clear to fellow shareholders. Saba needs to be more honest about its ultimate intentions for EWI. We find Saba’s deafening silence on this key matter to be unnerving.
Do Saba’s claims stack up?
In Saba’s open letter to EWI’s board of 27 November 2025, it accuses EWI’s board of overseeing consistent underperformance and of inadequate share buybacks to manage the discount. We thought we should take a closer look at Saba’s claims to see if they are fair. On closer inspection, we find that there are significant problems with Saba’s presentation that we believe its fellow shareholders should be aware of.
Focus on five-year period distorts results
First, Saba’s claims of poor absolute and relative performance focus heavily on a five-year time horizon. EWI, with its heavy growth focus had a fantastic run of absolute and relative performance in the immediate aftermath of the COVID-market related rout of March 2020. Interest rates fell as governments and financial authorities across the globe pumped unprecedented financial stimulus in an attempt to shore up their economies, and this buoyed growth stocks. However, this stoked inflation, and it became increasingly obvious that interest rates would rise to choke this off. EWI peaked early in 2021 and by the end of the year its shares were falling fast.
Today, five-year figures capture little of the run-up in growth stocks but almost all of the sharp reversal of previous strong gains. If these five-year numbers had been cast six or seven months earlier, they would have told a very different story. Because of this, the five-year numbers are not representative. It is also the reason why Saba cherry-picked three-year numbers last time around but has switched to using five-year figures today.
Baillie Gifford has always been clear that its approach is long-term in nature. We agree and think that longer-term horizons are a better assessment and, at the time of writing, EWI has provided annualised NAV and share price total returns of 9.0% and 8.7% per annum, respectively, over 10 years.
However, in this case it is also worth looking at the short term. In response to investor concerns, EWI shook up its investment approach. This involved greater concentration in the portfolio – allowing for deeper engagement with companies – and an increase in the upper market cap threshold, opening up a wider pool of opportunities. It also added more resource to its management team.
The positive results of that are evidenced in returns of 22.4% for NAV and 15.1% for share price over one-year, well-ahead of the return on its benchmark. In addition, the outlook for growth stocks has improved as interest rates are falling.
Saba continues to use the wrong benchmark
During its first campaign, Saba was widely criticised for using inappropriate benchmarks when making statements around the relative performance of its targets and, regrettably, there was a pattern – Saba’s chosen benchmarks tended to put its targets in a less favourable light. Fortunately, it was easy to spot but, nonetheless, this practice undermined trust between Saba and its fellow shareholders. We think this also contributed to the scale of its defeat and hoped that Saba would take on board this criticism, learn from the experience and change its playbook going forward. However, from what we have seen so far, this is not the case.
EWI’s benchmark has long been the S&P Global Small Cap Index (total return in sterling), which is representative of EWI’s global small cap universe. However, in its open letter, Saba has compared EWI’s performance to the FTSE All-Share Index, which is neither global nor small cap. In a period where large caps have been outperforming small caps, using the All-Share effectively sets the bar higher than it should be.
We think it is fair for other EWI shareholders to question why Saba took this approach.
Have buybacks been inadequate this year?
As we discussed in our August 2025 note on EWI (click here to read), in November 2024, EWI’s board unveiled a package of measures that specifically aimed to put the trust on a path to renewed growth. EWI’s “Reset for growth” was announced following a period of disappointing returns that led its board to take a look at the trust’s strategy, execution and performance.
Alongside the change in investment policy discussed above, EWI’s board also committed to returning £130m to shareholders during 2025. This followed a buyback programme that had already reduced EWI’s discount. EWI shareholders approved the changes on 18 December 2024. Since then, EWI has repurchased 6.9% of its issued share capital. Our view is that, with EWI’s average discount over the same period at 5.8%, the level is comfortable, and we see limited value in additional repurchases to drive the discount down even further, especially in an environment where small cap remains out of favour in most markets.
EWI has made real progress
Unfortunately, it seems like we have more of the same from Saba: an attempt to seize control of the company without launching a proper bid; nomination of a board that does not have the necessary resources or experience; and the use of inappropriate benchmarks and time frames to try and discredit EWI’s returns. Along with this, we have claims about EWI’s commitment to buybacks that do not appear to be grounded in reality and no acknowledgement of the significant progress EWI has made with its “Reset for growth” plan, which is now bearing fruit.
Given that it is repeating many of its previous mistakes, we implore Saba to reconsider its approach. For one, we strongly encourage Saba to abandon its attempts to seize control by the back door, engage with EWI’s board and come back with fair proposals that other shareholders can get behind. As things stand, EWI’s board has little choice but to incur costs to fight against a requisition that inevitably disadvantages all non-Saba shareholders.
We hope that Saba will think again and rescind this requisition, but if it will not, we must once again say to other EWI shareholders, please make sure you are informed about Saba’s proposals for your company and vote against Saba to protect your investment. Saba has added to its position since last time, so it will be even more important that everyone makes their views heard by voting.
Beware the opportunity cost of Saba’s proposals
We continue to believe that the real value in EWI stems from its global portfolio of small cap companies that are exposed to very long-term growth drivers, and not from making a quick turn on its discount. The choice, in our view, is therefore stark.
At present, EWI gives its shareholders exposure to companies such as SpaceX, Anlylam Phamaceuticals, PsiQuantum, AeroVironment and American Superconductor, which are disrupting and creating new industries.
We think shareholders need to be asking themselves whether they wish to give up the potential upside from: the world’s largest space company, with the only global telecoms network; cutting edge biotechnology that is curing previously untreatable diseases; the front runner in the race for quantum computing; a leading player in the use of drones for defence; and a company making kit that is badly needed to upgrade the world’s power networks. Would you be willing to give up that in exchange for a portfolio focused on making small gains from discount narrowing, to the benefit of Saba’s bottom line?
