- EWIIF +2.26%
Boaz Weinstein’s Saba Capital says that Edinburgh Worldwide Investment Trust has objectively failed to improve its performance - Jeenah Moon/Bloomberg A Wall Street activist has escalated its war with one of Britain’s investment giants by derailing a planned merger between two of its funds.
Baillie Gifford criticised Boaz Weinstein’s Saba Capital on Tuesday for blocking a planned tie-up between US Growth Trust and Edinburgh Worldwide Investment Trust (EWI).
It said Saba’s rejection of the deal will stop shareholders from cashing out, while also preventing Baillie Gifford from creating a larger firm focused on US companies.
It comes amid an ongoing spat between Mr Weinstein and the 117-year-old asset manager, with claims that the former is attempting to seize control of EWI.
Saba has built up 25pc and 28pc stakes in both EWI and the US Growth Trust, using its position to criticise Baillie Gifford over its poor performance.
The US fund said last week that EWI’s board had “objectively and categorically failed” to improve its performance.
In a stock market announcement, Baillie Gifford told investors that it will not be able to merge the two funds after Saba opposed the deal, having required support from 75pc of all shareholders.
It marks a ramping up of hostilities between Saba and Baillie Gifford, and a rejection of any possible truce.
Jonathan Simpson-Dent, EWI’s chairman, said: “Saba’s lack of support suggests to us that their agenda is to take control of the company for their own commercial gain at the expense of the remaining 70pc of shareholders.”
Meanwhile, a Saba spokesman said: “By pushing for a merger that benefits Baillie Gifford rather than shareholders, EWI’s Board has confirmed where its loyalties truly lie. Shareholders deserve a board that puts them first – not another cosy deal that entrenches an unaccountable manager.”
EWI controls £850m worth of assets, of which 12pc is invested in Elon Musk’s SpaceX.
It was opened by Baillie Gifford in 1998 to invest in innovative, high-growth companies.
A merger would have combined it with the £890m US Growth Trust, which owns a large position in SpaceX alongside stakes in some of the biggest tech companies in the world, including Amazon, Meta, Netflix and Nvidia.
The Wall Street fund launched its attack on EWI as part of a campaign against more than a dozen British funds, whose performances Mr Weinstein has labelled as ranging from “underwhelming” to “disastrous”.
Mr Weinstein started in Saba in 2009 after leaving his job as a derivatives trader at Deutsche Bank, aged 35.
Baillie Gifford, which is headquartered in Edinburgh, is one of the biggest fund managers in the UK with over £200bn in assets.
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