Under-fire Edinburgh Worldwide heralds near 1000% SpaceX return
A strong set of final results from Edinburgh Worldwide (EWI), including a doubling of its SpaceX valuation, may keep shareholders onside as the Baillie Gifford-run trust fights Saba Capital over its future.
The £917m global smaller companies trust, which has been involved in an increasingly heated war of words with the New York hedge fund, delivered a 29.7% rise in its net asset value (NAV) over the year to end of October, while its shares climbed 30.2% − almost tripling the S&P Global Small Cap index return of 12.8%.
The results cover the first full year following the implementation of its ‘path to growth’ strategy in 2024 to revitalise performance and tackle the discount, which currently sits at 6.4%.
The top performer was Elon Musk’s rocket company SpaceX, which has made even greater strides after the reporting period. A tender in December almost doubled the private company’s valuation, resulting in EWI’s exposure to the company jumping from 8.5% to 15.9%.
Since EWI first invested in SpaceX in 2018, the investment has delivered an absolute return of 947%, meaning for every £1,000 managers Douglas Brodie, Svetlana Viteva, and Luke Ward invested, they have made £10,470.
In the period covered by the results, SpaceX launched its tenth Starship flight, which the managers said demonstrated ‘a successful payload release and return to earth for both its ship and booster components’.
It also materially expanded its mobile communication ambitions by acquiring the rights to ‘significant global mobile spectrum’ from Echostar.
‘To date, SpaceX’s ability to provide services directly to mobile devices, without specialist antennae, has been limited,’ they said.
‘But when this spectrum is combined with the next generation of Starlink V3 satellites that Starship can launch, this limitation will fade away and unlock bandwidth for a host of new and exciting applications.’
SpaceX has been at the heart of the most recent dispute between EWI and Saba, with the latter criticising the trust for trimming its position in SpaceX ahead of the heightened valuation. The same accusation was levelled at another of its targets Baillie Gifford US Growth (USA), which had proposed a merger with EWI in November that was rejected by Saba.
Nasdaq-listed Alnylam also delivered strong returns, with the shares rising 66% over the period given the early success of its TTR cardiomyopathy drug. The managers said clinical data provided a ‘robust case’ for the drug to become the ‘first-line therapy in this life-limiting condition’.
‘With a growing consensus that this drug could be a $10bn-plus annual peak sales opportunity, it will become a key commercial underpinning to what we believe could be one of the most productive and transformative R&D pipelines in the industry,’ he said.
A total of 17 new positions were taken over the year, including Taiwanese semiconductor designer Aspeed, autonomous driving technology provider Horizon Robotics, and cancer diagnostics company Guardant Health.
The results come just days ahead of a shareholder vote to determine the fate of the trust. Saba, which owns 30% of EWI, is seeking to oust the board and install new directors – the second time it has tried to overthrow the board in the past year.
Jonathan Simpson-Dent, chair of the trust, said the ‘unwelcome’ requisition by Saba represents ‘a clear threat’ to EWI’s ‘independence, strategy and long-term value proposition’.
He encouraged shareholders ‘who wish to protect their investment trust and its unique mandate to vote against all of Saba’s resolutions before the rapidly approaching voting deadlines’.
Simpson-Dent said the board is focused on ‘delivering superior outcomes for shareholders as performance momentum continues to build, and is excited by this unique portfolio that is well positioned for long-term growth’.
