Victory for hedge fund raider Saba in duel with London trust
A US hedge fund raider scored a victory in its campaign against the UK’s investment trust sector.
Saba Capital defeated proposals at the Edinburgh Worldwide fund that would have allowed shareholders to cash out before it takes over the business.
The proposals came after Saba’s boss, US hedge fund manager Boaz Weinstein, twice attempted to take control of the £795million trust only to be defeated overwhelmingly by other investors.
But late yesterday, Weinstein’s war of attrition appeared to have worn down opposition when 53.8 per cent of shareholders voted against Edinburgh Worldwide’s exit proposals, compared with 46.2 per cent in favour. Turnout was equivalent to 68.4 per cent of the company’s shares.
Edinburgh – which counts Elon Musk’s rocket firm SpaceX among its main holdings – said the votes against the plans had come ‘almost entirely’ from Saba, which controls about 25 per cent of the trust, and ‘two other institutions’ it did not name.
Chairman Jonathan Simpson-Dent said: ‘This is a very disappointing outcome, particularly given the continued strength of support from independent shareholders who have consistently rejected Saba’s plan for control.’
War of attrition: Boaz Weinstein appeared to have worn down opposition when 53.8 per cent of shareholders voted against Edinburgh Worldwide’s exit proposals
He said that the result demonstrated how a minority investor could exert ‘disproportionate influence’ over a company.
As a result of the vote, Edinburgh said there was a ‘high likelihood’ that Saba would take control of the company at its annual general meeting (AGM) on April 30 when its directors will come up for re-election.
Richard Stone, head of industry body the Association of Investment Companies, said: ‘The result of this vote highlights the ability of a substantial minority shareholder to wield disproportionate influence.’
But Simon Walls, head of markets at the Financial Conduct Authority, told the Mail: ‘Shareholders’ votes are a crucial way of investors making their views known and are enshrined in law rather than our rules. We’d encourage shareholders to continue to exercise their right to vote.’
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