Baroness Ros Altmann, a former UK pensions minister, has waded into the investment trust battle by urging shareholders in Edinburgh Worldwide Investment Trust to reject an attack on its board.
The trust, managed by Baillie Gifford is facing a renewed attempt by US hedge fund Saba Capital Management to oust all its directors and install three US-based individuals.
Saba, which owns slightly more than 30% of Edinburgh Worldwide, has requisitioned a general meeting of EWIT’s shareholders on 20 January.
EWIT was one of seven UK trusts last February whose shareholders rejected Saba’s first attempt to remove directors.
Baroness Altmann said: “Edinburgh Worldwide Investment Trust’s retail and wealth management investors need to wake up now and vote if they want to protect their long-term interests against threats of a hostile takeover by US hedge fund Saba Capital.
“The long-standing UK investment trust sector is under attack, as its long-term, patient-capital model is being challenged by the short-term [view] of overseas investors.”
She added: “UK investment trusts are one of the strengths of our financial system, channelling patient capital into innovative, long-term assets which open-ended funds often struggle to hold. But this model depends on boards acting for all shareholders, not just an aggressive minority with a short time horizon. They are ideal investments for pension funds.”
Baroness Altmann’s intervention follows similar recommendations from shareholder advisory groups Glass Lewis and Institutional Shareholder Services. Pensions group Legal & General has also said it would be voting against all of Saba’s resolutions.
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