Saba Capital, led by Boaz Weinstein, has successfully ousted the board of Edinburgh Worldwide Investment Trust (EWIT), marking a significant shift in control toward the activist hedge fund. Shareholders voted to remove chair Jonathan Simpson-Dent and five other board members, replacing them with three nominees backed by Saba. This change is particularly impactful given EWIT’s substantial investment in SpaceX, which constitutes about 20% of its portfolio and has seen a remarkable 947% return since 2018.
The boardroom battle has highlighted a transition in EWIT’s shareholder base, with U.S. institutional funds now holding 40% of shares, as retail investors have largely exited. Saba plans to revamp EWIT’s strategy to focus on UK-listed investment trusts and implement an active share buyback program, aiming for a single-digit discount to net asset value. This overhaul comes as a response to criticisms of the previous management’s performance and the trust’s significant discount to NAV.
Market professionals should note that Saba’s victory signals a potential shift in investment strategies within the trust sector, as institutional investors increasingly seek to capitalize on high-growth opportunities like SpaceX while addressing governance concerns.
Source: cnbc.com