According to CNBC, activist investor Boaz Weinstein is calling for the complete removal of the board at Edinburgh Worldwide Investment Trust, a Baillie Gifford-managed tech fund. His firm Saba Capital owns approximately 30% of the trust’s shares and sent a formal letter to the board on Thursday. The trust’s net asset value has dropped 30.8% over the past five years while its share price fell 35%. Meanwhile, its benchmark FTSE All-Share Index gained 71.4% during the same period. The trust holds significant positions in companies like Elon Musk’s SpaceX, which makes up 8.4% of its portfolio. Weinstein described this performance gap as “unprecedented” value destruction that represents more than 100% underperformance versus the benchmark.
The activist battle heats up
This isn’t just your typical shareholder complaint. When an activist with 30% ownership calls for removing the entire board, they’re basically declaring nuclear war. Weinstein’s letter to the board doesn’t mince words either – he says they’ve “objectively and categorically failed” shareholders. That’s about as direct as it gets in the polite world of British investment trusts.
The performance problem
Here’s the thing about that 100%+ underperformance number – it’s absolutely brutal in investment terms. We’re not talking about missing by a few percentage points. The trust lost over a third of its value while the broader market gained more than 70%. That’s the kind of gap that gets fund managers fired. And it’s not like this is some obscure benchmark they’re comparing against – the FTSE All-Share is about as mainstream as it gets for UK investors.
The SpaceX factor
What makes this particularly interesting is the trust’s heavy SpaceX exposure. On paper, having nearly 10% of your portfolio in one of the most exciting private companies should be a winner. But private company valuations are notoriously tricky. They don’t trade daily like public stocks, so their reported values can lag reality. Could the trust be overvaluing its SpaceX position? Or maybe not marking it down enough as the broader tech market corrected? It’s a valid question when you’re underperforming this dramatically.
What happens next
With 30% ownership, Saba has serious leverage here. They can likely force a shareholder vote on the board’s removal. But the real question is whether other shareholders will join the rebellion. Baillie Gifford has been a respected name in growth investing for years, but these numbers are hard to defend. The trust focuses on “significant disruptive growth potential” according to its website, but when your disruption includes destroying shareholder value, something’s clearly broken. This could become a textbook case of how activist investors are increasingly targeting underperforming investment trusts.
