After announcing its intention in an open letter last week, Saba Capital has now officially requisitioned the Edinburgh Worldwide board.
The activist investor, which is Edinburgh Worldwide’s largest shareholder, has called on the board to hold a general meeting to vote on replacing the trust’s directors.
In a letter to other shareholders, the hedge fund said the trust’s track record suggests “change is necessary”.
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Both the trust’s NAV and share price returns, which are down 30.6% and 35.6% over the past five years, have lagged the S&P Global SmallCap Price Index, which was up 33.6% as of 26 November.
Over one year, the trust’s share price is up 14.9%, ahead of the benchmark’s 2.7%.
Responding to the requisition notice, Jonathan Simpson-Dent, chair of Edinburgh Worldwide, called the move a “power grab”.
“Saba’s letter does not acknowledge the significant progress Edinburgh Worldwide has achieved since this board reset the company on a path for growth a year ago,” he said. “Since then, the NAV total return has been 13.1%, well ahead of the S&P Global Small Cap Index, the company’s benchmark index.
“Furthermore, the company’s proactive steps over the last year have supported a tightly managed discount, currently 5.4%, significantly narrower than the Global Smaller Companies peer group weighted average discount of 11%.
“Shareholders should not be fooled by this US hedge fund’s claims. This board remains fully committed to serving the best interests of all shareholders. Saba’s proposal would result in a board answerable to only one.”
Board nominations
In the hedge fund’s letter, Saba also outlined the three candidates they have nominated for the board.
They include Gabi Gliksberg, founder & managing partner of ATG Capital Management, Michael Joseph, portfolio manager & deputy CIO at Stansberry Asset Management, and Jassen Trenkow, a former finance and banking executive with who has held senior positions at Barclays and Goldman Sachs Asset Management.
“To source these nominees, we intentionally avoided the traditional small UK network of repeat non-executive directors who often sit together on multiple trust boards,” Saba said.
“This entrenched system of familiarity and industry ‘cosiness’ often weakens accountability and contributes to persistent underperformance, double-digit discounts and decisions that protect the interests of managers rather than shareholders.”
The hedge fund said decisions regarding the trust’s future would be made solely by the new, independent directors.
“As a shareholder, however, we would encourage the new directors to evaluate all available options to improve share price performance and maximise value, just as we have successfully encouraged other trusts’ boards to do.”
Saba expects the meeting to be scheduled by early 2026.
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