On 27 November, New York-based activist investor Saba Capital wrote to the board of Edinburgh Worldwide stating its intent to requisition a general meeting with the intent of reconstituting the investment trust’s board.
Edinburgh Worldwide was one of seven investment trusts in which Saba saw an opportunity to gain greater control in December 2024. The activist investor requisitioned general meetings at all seven during the opening months of 2025, with the aim of replacing the boards of directors with new appointments, including two of its own directors.
Saba cited persistent share price underperformance and alarming discounts to net asset value (NAV) in its attempt to displace the trusts’ boards.
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“Therefore, we will requisition a general meeting of the Company to remove the entire incumbent Board and, in its place, appoint a new board composed solely of qualified, independent directors who are committed to delivering long-term value for all shareholders.”
As of 26 November, Edinburgh Worldwide, managed by Baillie Gifford, traded at a 5.1% discount to NAV. This narrowed to 4.3% on 27 November following Saba’s letter. As of 27 November, the average discount across all investment companies (excluding 3i which is large enough to distort the data) is 13.5%, according to the Association of Investment Companies (AIC), an industry body that represents investment trusts.
Edinburgh Worldwide responds to Saba
Hours after Saba stated its intention to call the meeting, Edinburgh Worldwide’s board responded, expressing its disappointment that the activist investor was once again attempting to displace the board.
“We are disappointed by Saba's open letter,” said Jonathan Simpson-Dent, chair of Edinburgh Worldwide. “Throughout the last year we have sought to engage with Saba to understand their objectives and to enter into a constructive dialogue regarding options for an equitable and holistic solution, including a return of capital.”
Simpson-Dent went on to say that the Saba letter doesn’t reflect the progress that the board has made over the past year, during which time its NAV total return has been 17.5%, compared to 4.8% for its benchmark, the S&P Global Small Cap Index.
“The benchmark cited in Saba's open letter, the FTSE All-Share, is not EWIT's,” said Simpson-Dent. “It makes little sense to judge a global small-cap trust against a UK all-cap benchmark, a point noted by the sell-side analyst community today.”
He also highlighted that the trust’s discount was “significantly narrower than the Global Smaller Companies peer group weighted average discount of 10.9%”.
AIC: it is vital that shareholders vote
When Saba attempted to take control of Edinburgh Worldwide and six other investment trusts early this year, the proposals were defeated by surprisingly large numbers of shareholders turning out to exercise their shareholder voting rights.
The AIC has called for shareholders in Edinburgh Worldwide to once again ensure their voices are heard.
“It is vital that shareholders vote their shares,” said Richard Stone, CEO of the AIC. “It’s important that shareholders understand that the final decision rests with them. Every vote counts.”
Information on how to vote and attend general meetings is available via the AICs.
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