Wall Street magnate’s criticism of City investment funds is ‘harmful to the UK’

US Hedge Fund’s Campaign Sparks Concerns for UK Investment Sector

Boaz Weinstein, founder of Saba Capital, has criticized the Edinburgh Worldwide Investment Trust (EWI) for what he describes as significant underperformance, raising alarms among UK investment leaders about the potential impact on the country’s reputation with global investors.

Jonathan Simpson-Dent, who chairs EWI, has publicly responded to Weinstein’s activist efforts, warning that such aggressive campaigns could undermine confidence in the UK’s investment industry and make it more challenging for trusts to attract and retain talent.

Over the past year, EWI has been one of several trusts targeted by Weinstein, who has sought to replace boards he deems ineffective. Other investment trusts feeling pressure from Saba Capital include Herald Investment and Baillie Gifford US Growth Trust.

Escalating Tensions and Legal Threats

Last week, tensions intensified when Saba Capital, which holds a 30% stake in EWI, threatened legal action unless the trust disclosed more details about its decision to reduce its investment in Elon Musk’s SpaceX.

Speaking to The Telegraph, Simpson-Dent described the situation as a “hostile campaign,” noting that the negative atmosphere could deter qualified candidates from joining the sector. He expressed concern that if the industry is perceived as risky and contentious, it could suffer lasting harm.

Boardroom Battle Looms

Saba Capital has proposed removing all six of EWI’s independent non-executive directors and replacing them with three US-based nominees of its own choosing. Shareholders will vote on these resolutions at an upcoming meeting scheduled for January 20.

Simpson-Dent warned that if Saba succeeds, it could send a discouraging signal to international investors about the UK’s investment environment.

Broader Implications for the UK Market

Simpson-Dent highlighted that the UK equity market has already been experiencing stress and capital outflows in recent years. He argued that such activist interventions do little to reassure investors that the UK remains an attractive destination for investment.

He also suggested that Saba’s true objective may be to gain control of EWI, using it as a platform to expand its presence in the UK. Rather than making a formal takeover offer at a premium, Simpson-Dent accused Saba of seeking to acquire the trust at a bargain, without properly valuing its assets.