Edinburgh Worldwide investors reject Saba for second time

Shareholders of Edinburgh Worldwide (EWI) have overwhelmingly voted against Saba Capital’s proposals to remove its board for a second time today.

Excluding shares owned by Saba, 92.7% of votes rejected the US hedge fund’s plan to replace the existing board members with its own candidates.

Yet it was still a close call, with just 53.2% of the overall votes being cast against the proposals, according to an announcement this afternoon. 

Having first fended off the proposals in February last year, the £790m Baillie Gifford-run trust had a higher hurdle to overcome this time around, with Saba having upped its stake from around 24% at last year’s vote to 30% today.

Assuming all non-Saba shareholders voted against the hedge fund’s proposals, some 60% of shareholders in total would need to show up in order to balance out Saba’s substantial voting power – a tall order seeing as 64.7% of shares were exercised last time following a widespread campaign.

This is in stark comparison to the average 15% turnout at each of EWI’s annual general meetings over the past five years.

However, shareholders representing 70% of Edinburgh Worldwide’s register turned up to have their votes counted this time.

Chair Jonathan Simpson-Dent said the vote of confidence shows that non-Saba shareholders have ‘clearly stated their preference for EWI’s unique and differentiated mandate’.

‘Following a year of significant and costly distraction, we are ready to return our full attention to our primary purpose: investing in innovation, transformation, and exceptional potential in a way that respects the clear wishes expressed by the majority of shareholders both last February and again today,’ he added.

The chair acknowledged that Saba remains the trust’s largest shareholder by some margin, meaning the board will ‘seek constructive engagement with them to develop potential solutions that allow us to move forward’.

Saba’s main grievances related to the trust’s underperformance, with EWI shares falling 42.4% over the past five years.

However, the trust overhauled its investment approach in an attempt to solve this poor performance in November 2024, which saw the trust concentrate its portfolio and increase the minimum holding size limit.

This refreshed strategy has yielded strong results, with shares up 32% since then, greatly outperforming the 13.2% return made by its average peer in the Global Smaller Companies sector.

Shareholders who backed Saba’s proposal, on the other hand, were essentially voting blindly, with the firm not revealing a plan for how it would lead the trust differently.

When Simpson-Dent said shareholders deserved transparency around Saba’s intentions in the lead up to the vote, founder Boaz Weinstein said its new directors would decide on the best course of action independently.

‘We haven’t disclosed a plan because all decisions about EWI will be made by a new, independent board – not by Saba,’ the Saba founder wrote on X. ‘That differs from our last campaign, when we nominated a Saba representative.’