27th Nov 2025 15:31
(Alliance News) - Edinburgh Worldwide Investment Trust PLC on Thursday responded to calls from agitator investor Saba Capital Management LP to replace its board.
This followed an open letter from New York-based Saba, claiming consistent underperformance by the Edinburgh-based investment firm, which describes itself as focused on "long-term" growth. Saba shared plans to requisition a general meeting of EWIT, proposing the removal of all current board members.
EWIT chair Jonathan Simpson-Dent said the letter "does not represent the significant progress EWIT has made since this board reset the company on a path for growth a year ago."
He said that the S&P Global Small Cap index was EWIT's benchmark, rather than the FTSE All-Share index, which Saba had cited as evidence of underperformance.
EWIT's net asset value stood at 165.44 pence per share at April 30, the end of its first half, down 2.9% from 170.40p at October 31. By comparison, the S&P Global Small Cap index's NAV declined 7.2% over the same period, EWIT said. Back in June, the firm reassured investors that one of its main detractors for the first half, US-based defence contractor AeroVironment Inc, had a strong order backlog.
Nonetheless, Saba, which owns around 30% of EWIT, criticised the firm for "consistent" failure to perform, and "inadequate" buyback activity.
"We do not have faith in the current board's ability to implement the necessary strategic changes. As the company's largest shareholder, we feel a duty to our fellow shareholders to drive this essential change," Saba said.
This follows a spree of pot-stirring among smaller UK funds by the US investor. In December 2024, it requisitioned meetings at eight firms in which it held shares, similarly calling for management shake-ups. This provoked widespread dissent, as smaller firms said Saba was attempting to take over as fund manager.
Since then, Saba has reconciled with some of its investees, which it referenced in its address to EWIT: "We remain profoundly frustrated by the [EWIT] board's prolonged inertia, especially given the decisive actions taken by the boards of several other UK investment trusts to increase share prices and narrow persistent discounts to NAV."
EWIT shares edged up 0.7% to 205.95 pence each on Thursday afternoon in London, having risen 14% in the past year.
As of October 31, EWIT traded at an average 7.2% discount to NAV, according to its manager Baillie Gifford & Co. This compares to an average discount of 7.6% a year earlier, and a 13% discount at the end of October 2022.
Simpson-Dent added: "We are disappointed by Saba's open letter. 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.
"While we are open to discuss board composition with Saba, we would strongly reject any proposal to replace the entire board and the ambiguity that would follow."
By Holly Munks, Alliance News reporter
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