Activist investor Saba Capital, led by Boaz Weinstein, has secured control of the Edinburgh Worldwide Investment Trust (EWIT) following a decisive shareholder vote. The victory marks a major shift in the governance and strategic direction of the fund, which holds a significant stake in SpaceX.
Shareholder Vote Ousts Board Members
At the recent shareholder meeting, investors voted in favor of Saba Capital's proposal. This action resulted in the removal of the current EWIT Chair, Jonathan Simpson-Dent, alongside five other board members. The vote also paved the way for the appointment of three board nominees backed by Saba.
Strategic Implications for EWIT
The outcome grants Weinstein's firm control over EWIT, a fund known for its focus on cutting-edge public and private technology companies, including a substantial holding in SpaceX.
- SpaceX Stake: SpaceX remains EWIT's largest holding, accounting for approximately 20% of the portfolio. The company's private market valuation has increased significantly ahead of an anticipated Initial Public Offering (IPO).
- Weinstein's Criticism: Weinstein had previously criticized the board's decisions, particularly regarding the sale of portions of the investment in the prior year, and highlighted what he termed "unprecedented value destruction" due to the fund's discount to its net asset value (NAV).
Saba's Proposed Overhaul
Saba Capital plans to reposition EWIT while maintaining its listing in London. The proposed strategy involves a significant overhaul of the fund's investment mandate:
- Portfolio Shift: The trust would pivot to a portfolio predominantly composed of UK-listed investment trusts, while retaining a global investment scope.
- NAV Target: Saba aims to narrow the discount to NAV by implementing an active share buyback program, targeting a single-digit discount.
Dynamics of the Boardroom Battle
The protracted dispute highlighted differing views on the fund's management. While Simpson-Dent noted the substantial return generated by the SpaceX investment since 2018, Weinstein continued to challenge the board's stewardship. The final vote indicated a shift in investor sentiment, with four U.S. institutional funds—representing 40% of the share base—voting against the existing board.
