Edinburgh Worldwide shareholders urged to vote on trust’s future

Private savers who own shares in a prominent investment trust have only days left to vote in a ballot that will determine the fund’s future.

Shareholders in Edinburgh Worldwide, which is managed by Baillie Gifford and holds ‘disruptive’ companies such as Elon Musk’s SpaceX, are being asked to approve the sacking of the trust’s entire board of directors and their replacement by three candidates put forward by an American hedge fund called Saba Capital. Saba failed in a similar attempt to replace the board last year.

• Read: 7 investment trusts face crunch votes: what it means for investors

The vote will take place at a special meeting on 20 January. However, private investors who own their shares in the trust via platforms such as Fidelity will need to vote via their platform, whose deadline could be as much as eight days earlier. We explain how to vote below.

What the row is about

Saba says the Edinburgh Worldwide board is too close to the trust’s manager, Baillie Gifford, when boards are supposed to be independent and to hold managers to account. The hedge fund says the board has failed to halt what it called the trust’s ‘underperformance’ and has not acted vigorously enough to address the share price discount.

In response, the board said that Saba ‘continues to prioritise its own commercial interests to the potential detriment of other shareholders’ and that Saba’s nominee directors would not be independent. ‘All three have been selected by Saba, and their appointment in place of the current directors would effectively hand Saba control of the [trust],’ it said.

The board added: ‘Saba has not disclosed its plans should it gain control. It previously stated its intention to be appointed as investment manager, which would fundamentally change the [trust’s] investment strategy and financially benefit Saba.’

Saba said: ‘We do not have faith in the current board’s ability to implement the necessary strategic changes and feel a duty to our fellow shareholders to drive improvements – hence why we have proposed new director candidates to replace the current board. The directors we have nominated have no connection to Saba and, if elected, will not serve under the thumb of any shareholder – or the investment manager.’

Saba has increased its stake in the trust from around 25% at the time of the last vote to more than 30% today. Edinburgh Worldwide’s board said: ‘This makes your vote more important than ever. If shareholders want to keep the [trust] out of Saba’s hands, they must turn out and vote in even greater numbers than before.’

Analysts at Numis, the broker, said: ‘We believe what the future will look like under the new board is the key missing piece of the puzzle that makes it difficult for investors to make an informed choice about the new board … we believe investors should vote against the proposals.’

How to cast your vote

If you own shares in Edinburgh Worldwide via Fidelity and want to vote, log on to your account at fidelity.co.uk, then select ‘My accounts’ from the top-right menu bar and go to ‘Profiles’, select ‘Preference centre’ and then the ‘Shareholder voting & information’ tab. Turn on the service by clicking the tab from ‘Off’ to ‘On’. Within two working days you’ll receive an email from a partner company, Broadridge. You will then be able to vote. If you have not yet set up this service, be sure to allow for the two days required for it to be up and running. In view of the early deadlines for voting via platforms and the extra two days required to set up the voting facility it would be advisable to act as soon as possible.

Further questions?

Edinburgh Worldwide has appointed a company called Georgeson to help shareholders with the voting process; email EWIT@georgeson.com. There is also more information on the trust’s website. Saba said shareholders with questions could contact Alliance Advisors on 0800 208 1325 or saba@allianceadvisors.com. Saba’s website is here.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Shares in Edinburgh Worldwide investment trusts are listed on the London Stock Exchange and their price is affected by supply and demand. Investment trusts can gain additional exposure to the market, known as gearing, potentially increasing volatility. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of  Fidelity’s advisers or an authorised financial adviser of your choice.