Trust chair spreading misinformation, says Saba – Daily Business

Jonathan Simpson-Dent: accused of protecting his job (pic: DB Media Services)

A New York hedge has accused the chairman of Edinburgh Worldwide Investment Trust of distributing misinformation in order to save his job.

Saba Capital Management, which has the largest stake in the Baillie Gifford-run trust, issued an open letter to fellow shareholders pressing its case to install three nominees on to the board.

“We are speaking to you directly because you deserve clarity – not the misinformation that EWI Chairman Jonathan Simpson-Dent has been distributing in an effort to save his position,” says Saba.

“This is the same chairman who presided over a five-year loss that ranked EWI dead last – 66th out of 66 – among its peers in a period when global equity markets delivered substantial gains.

“His goal is not to protect your investment. It is to protect his directorship. In this letter, we provide you with the facts we believe he would prefer you not to have.”

Saba says that in the event shareholders elect a newly constituted, independent board at EWI’s AGM on 30 April, it intends to submit itself to the board for consideration as the company’s next investment manager.

Any change to EWI’s investment manager, including the potential appointment of Saba as manager, would be at the sole discretion of the company’s board, in accordance with its fiduciary duties.

Its proposed approach to management includes repositioning the trust as a portfolio predominantly composed of UK-listed investment trusts, with a global mandate to seek out the best closed-end fund and investment trust opportunities wherever they exist.

“We expect the majority of the portfolio to be invested in the UK – a market we know deeply and where we see compelling, durable opportunity.”

The company would retain its closed-end structure and remain listed on the London Stock Exchange.

“This is not a strategy of suffering discounts, as EWI shareholders have suffered under Baillie Gifford. Instead, it is a strategy built around profiting from them,” it says.

This proposed material change to the company’s investment policy would require approval from the Financial Conduct Authority and a shareholder vote under FCA Listing Rules.

Saba adds that shareholders have been waiting for a “genuine liquidity event”, adding that “the incumbent board had the opportunity to deliver one and it could not – so there is no reason to believe the outcome will be different next time.”

It says: “Saba’s Enhanced Liquidity Proposal is the only path on the table that delivers actual liquidity, something the current board has proved incapable of doing.

“For shareholders and wealth managers with clients seeking resolution, the practical consequence of re-electing the current directors is straightforward: the uncertainty continues and the timeline for any meaningful liquidity remains open-ended. The vote on 30 April is, at its simplest, a choice between the continued stalemate and a real resolution.”

It concludes: “We believe these commitments provide a clear, disciplined and shareholder-aligned path forward. While Mr. Simpson-Dent would like you to believe that uncertainty lies ahead if Saba’s nominees are elected, it is our hope that the above commitments show you that is not the case.

“However, what should concern you is the opposite: the long-term underperformance that is very likely to continue if the current board remains in place. Ahead of the AGM, we want to ensure you have all of the facts before voting.”

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