The Chairman of the FTSE 250 Edinburgh Worldwide Investment Trust (EWIT), Jonathan Simpson-Dent, has dismissed claims by US hedge fund Saba Capital that it could better manage the trust, stating there is “no evidence” to support such assertions, according to a report by This is Money.
Simpson-Dent challenged the qualifications of Saba, led by Wall Street financier Boaz Weinstein, to oversee early-stage investments, questioning whether the firm had the necessary expertise or regulatory approvals to run a UK-listed investment trust.
Saba has launched a campaign to replace directors at seven UK-listed trusts, arguing the current leadership has failed shareholders and made subpar decisions.
In a letter to Weinstein, Simpson-Dent scrutinised the credentials of Saba nominees, including Jonathan Zucker, a former lawyer and investment manager, and Paul Kazarian, a Saba Portfolio Manager, expressing doubts about their suitability.
He also raised concerns over the potential fees Saba might charge if it took control of EWIT, suggesting they could be as much as eight times higher than the trust’s current costs.
Simpson-Dent told Weinstein ‘we have seen no evidence that supports’ the claims that Saba ‘would be better placed to run Edinburgh Worldwide’.
Analysts are warning of broader implications for the UK investment trust sector if Saba’s activist campaign succeeds.
Peel Hunt, a brokerage firm, noted that if Saba gains control of one or more of the targeted trusts, it could enable the hedge fund to pursue similar campaigns across other trusts.
Saba currently holds substantial stakes in 17 additional trusts beyond the seven already targeted, according to Peel Hunt.
Investment bank JP Morgan echoed concerns, pointing out that many of Saba’s proposed directors lack significant experience with UK-listed investment trusts and their regulatory frameworks.
As Saba presses ahead with its bid, the spotlight remains on the potential ripple effects across the broader London market and the future of the investment trust model in the UK.
