Edinburgh Worldwide Investment Trust is under persistent attack from Boaz Weinstein's Saba Capital, according to reports. Saba Capital has been campaigning for an overhaul of the trust's investment and governance strategy since building up a major stake in several investment trusts in 2024. Boaz Weinstein's campaign has centered on Edinburgh Worldwide's decision to sell down its stake in SpaceX, which he claimed defied commercial logic. Boaz Weinstein has tabled fresh motions for shareholders to vote on at the trust's upcoming AGM to install three new board members and a new investment manager.
The tender offer gives investors the opportunity to instantly realise their share of its assets, except for the fund's holding in SpaceX, where they would wait until a future liquidity event like an IPO. This move comes after 92% of Edinburgh Worldwide investors without links to Saba voted against Saba's resolutions at a requisitioned general meeting in January. The closing date for the Edinburgh Worldwide exit tender offer is 2pm on April 8. Edinburgh Worldwide and Impax have embarked on exit tender offers to give investors who do not want to risk being marooned in a fund controlled by Saba the chance to get out at close to net asset value. The formal close for the Impax exit tender offer is 11am on April 14, but for some platforms it could close as early as April 10.
The Financial Conduct Authority is under fire for failing to protect small shareholders in investment trusts besieged by carpetbaggers, sources say. Leading industry figures, including Glen Suarez and Jonathan Simpson-Dent, have called on the FCA to stop raiders from riding roughshod over small investors. Boaz Weinstein is exploiting loopholes in regulation to make repeated attempts to take control of trusts against the wishes of most shareholders, according to reports. The FCA has launched a review into the rules after Saba took stakes in a string of investment trusts and tried to install its own directors on their boards.
Simon Walls, the FCA's head of markets, suggested in a blog that the watchdog would be reluctant to intervene, arguing trusts could take legal action or amend their articles of association to defend themselves against raiders. The trusts say taking legal action or amending articles of association would be prohibitively costly and impractical. The FCA said it hoped record voting turnouts continued and that boards have legal powers if they consider results not in the best interests of the company.
Richard Stone, head of the Association of Investment Companies, said it is deeply unjust that we could see the loss of two investment trusts whose shareholders have repeatedly backed the board. The exact percentage of stake Saba Capital holds in Edinburgh Worldwide Investment Trust and Impax Environmental Markets trust, as well as how many other investment trusts are currently being targeted by Saba Capital or similar activists, are not specified in available reports. The potential long-term impacts on the UK investment trust market if exit tender offers become a common response to activist attacks also remain uncertain.