Edinburgh Worldwide (EWI) has beaten off Saba Capital for a second time in a year.
Excluding shares held by Saba, shareholders representing 92.7% of shares voted in the general meeting in Edinburgh today rejected the activist hedge fund’s resolutions to remove the investment trust’s board of directors.
EWI chair Jonathan Simpson-Dent (pictured above) thanked shareholders for the record turnout that saw 70.5% of its shares voted in the meeting requisitioned by Saba: “Shareholders have clearly stated their preference for EWIT’s unique and differentiated mandate, investing in some of the world’s most exciting and transformative companies,” he said.
The chairman said the board was focused on its “Path for Growth” to repair the impact of the 2022/23 crash, with the shares up 17% in the past year but down 42% over five years.
EWI shareholders responded to Simpson-Dent’s appeal to save the 27-year-old fund which, under Baillie Gifford, has aimed to capture the best growth opportunities in both listed and unlisted companies across the world.
In doing so, they ignored Saba’s attempts to exploit the poor five-year performance, damage Simpson-Dent’s credibility over his previous involvement in an insurance intermediary later fined for mis-selling, and to stoke up controversy over its partial sale of SpaceX last year. On the latter point Saba’s case was weakened last month when the valuation of Elon Musk’s rocket company doubled to $800bn, hiking it to nearly 16% of the fund and giving it more than sufficient exposure to the rapidly growing business.
The result marks a heavy defeat for the New York-based company founded by former investment banker Boaz Weinstein. Deploying its 30.7% stake in the trust, Saba took a 46.8% share of each of the nine votes to sack the existing six non-executive directors and replace them with three of its nominees. In each case, it was overwhelmed by 53.2% of votes against its resolutions, a stock exchange announcement showed.
Simpson-Dent added: “Saba remains our largest shareholder and we will continue to seek constructive engagement with them to develop potential solutions that allow us to move forward. Following a year of significant and costly distraction, we are ready to return our full attention to our primary purpose: investing in innovation, transformation, and exceptional potential in a way that respects the clear wishes expressed by the majority of shareholders both last February and again today.”
Richard Stone, chief executive of the Association of Investment Companies (AIC), said: “This second win for Edinburgh Worldwide against Saba Capital shows how much ordinary investors value their investment trust.”
He added: “Once again, the vote has highlighted the importance of broad shareholder participation so that low turnouts don’t hand victory to large minority shareholders by default. We will continue to press the government to follow through on its promise to bring shareholder voting into the digital age by implementing the Bill of Shareholder Rights recommended by the Digitisation Taskforce.”
The vote at EWI was supervised by Civica Election Services, which the investment trust’s board appointed as independent assessor.
Shares in EWI were steady at 222p.
Our view
James Carthew, head of investment company research at QuotedData, said: “So, a record turnout and almost everyone bar Saba rejecting its proposals. Surely the message must get through to Saba that investors don’t want it in charge; not of EWI, nor Herald, nor Impax Environmental Markets, nor any other trust for that matter. If it wants to run a trust it must IPO one. Time for it to admit defeat and accept the generous exit terms that Herald and Impax Environmental have put on the table.”
