Activist Investor Boaz Weinstein Demands Ouster of Entire Board at Baillie Gifford-Run Tech Trust - Article

Activist investor Boaz Weinstein

is pushing for the removal of the entire board of the Baillie Gifford-managed Edinburgh Worldwide Investment Trust (EWIT), arguing that the directors have presided over what he calls “unprecedented” destruction of shareholder value.

In a sharply worded letter sent Thursday, Weinstein - whose firm Saba Capital holds roughly 30% of EWIT’s shares - accused the board of having “objectively and categorically failed” to deliver acceptable returns.

EWIT invests globally in early-stage and high-growth public and private companies focused on technological innovation. Its holdings include SpaceX, which accounts for 8.4% of the portfolio, according to Baillie Gifford.

Weinstein said the trust’s net asset value has fallen 30.8% over the past five years, while its share price has dropped 35%. Over the same period, the FTSE All-Share Index - which he cited as a relevant benchmark - rose 71.4%. Saba argued that EWIT’s NAV and share price returns therefore lagged the benchmark by more than 100 percentage points.

“The magnitude of this value destruction is unprecedented among peer U.K. equity investment trusts,” Weinstein wrote.

EWIT Chair Jonathan Simpson-Dent rejected the comparison, saying the trust’s benchmark is the S&P Global Small Cap Index, not the FTSE All-Share. He argued that “it makes little sense” to compare a global small-cap strategy with a U.K. all-cap index, adding that EWIT’s NAV total return of 17.5% this year outpaced the S&P index’s 4.8%.

A Saba spokesperson countered that EWIT itself referenced the FTSE All-Share in its 2024 annual report as “a widely used measure of performance for UK listed companies,” noting that the trust has underperformed both the FTSE and the S&P small-cap index over multiple time frames.

EWIT, which had £847.15 million in total assets as of Oct. 31, now faces a call from Saba for a general meeting to elect a new slate of “qualified, independent directors” committed to reversing the trust’s fortunes. “We remain profoundly frustrated by the board’s prolonged inertia,” Weinstein wrote. “We do not have faith in the current board’s ability to implement the necessary strategic changes.”

Simpson-Dent said the board remains open to “constructive dialog” with Saba and to exploring solutions including returning capital, but warned it would “strongly reject” any attempt to replace the entire board, citing the risk of “ambiguity” that could follow.

He noted that EWIT has maintained a relatively narrow discount of 5.6%, compared with the 10.9% average for global smaller-companies trusts.

Saba’s latest move follows an unsuccessful attempt last year to reshape the EWIT board. Weinstein, whose $6 billion New York-based hedge fund specializes in credit relative-value trades, has recently increased his exposure to U.K. investment trusts, warning at the Sohn London conference that “a storm is brewing” as discounts widen across the sector.