Baillie Gifford closed-end fund shareholders rejected activist investor Boaz Weinstein’s plan to oust the board of hedge fund Saba Capital.
At a general meeting requisitioned by Saba on Tuesday, 53.2% of those who voted rejected a plan to sack six directors of the Edinburgh World Investment Trust and replace them with three Saba-backed candidates. Overall, 92.7% of all EWIT shares, excluding shares held by Saba, voted against the proposals.
The decision represents Saba Capital’s long-term and sometimes second defeat bitter campaign against the board Edinburgh around the worlda UK fund that invests in leading public and private technology companies.
The $6 billion New York-based hedge fund firm, which increased its stake in EWIT from 25% to 30%, first attempted to shake up EWIT’s board in February last year, but ultimately failed to win investor support.
Edinburgh Global Investment Trust.
Jonathan Simpson-Dent, chairman of the Edinburgh Worldwide Investment Trust, criticized the campaign by activists as a “significant and costly distraction”.
“For the second time in less than a year, Edinburgh Worldwide’s shareholders voted decisively against Saba’s proposal to install their own nominees for the board of directors and the uncertainty it would entail,” Simpson-Dent said in a statement.
“Saba remains our largest shareholder and we will continue to seek a constructive relationship with them to develop potential solutions that will allow us to move forward.”
EWIT had total assets of £847.15 million ($1.1 billion) as of October 31.
“Aggressive Campaign”
Weinstein focused heavily on the large discount to EWIT’s net asset value. While EWIT’s NAV discount has narrowed recently, the US manager pointed to long-term underperformance, which it called “unprecedented value destruction”.
It also makes up about 8% of Elon Musk’s SpaceX portfolio, the trust’s largest holding. In an open letter earlier this month, Weinstein accused EWIT’s board of “misleading” shareholders over the SpaceX stock sale.
In a January 7 response, EWIT said the US hedge fund was waging an “aggressive campaign” to “seize control of the company to prioritize its own commercial interests, potentially to the detriment of other shareholders”.
CNBC has reached out to Saba Capital for comment.
Many UK investment trusts had fixed NAV discounts common foundation trade For the Weinstein firm in recent years, the manager believes a “storm” is brewing for shareholders.
Last week Saba Capital in a separate step a wind down according to Workspace groupA real estate investment trust (REIT) that manages office properties in London and the South East of England.