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47. Uncovering Trusts – Edinburgh Worldwide Investment Trust (EWI): Vote now to keep the trust alive
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In this episode, our director of content, investment companies Milosz Papst talks about Edinburgh Worldwide Investment Trust. This is a timely podcast as the trust is once again under fire from US-based activist hedge fund Saba Capital Management. Shareholders voted decisively against Saba’s proposals in February 2025 and Edinburgh Worldwide’s board is urging shareholders to do so again. This time round, Saba has amassed a larger stake in the trust and is proposing to replace Edinburgh Worldwide’s board with three of its own representatives but has given no indication about the trust’s future strategy. Timing is tight as the general meeting is scheduled for 12:00 noon on 20 January 2026. The cut-off for submitting votes is 12:00 noon on Saturday 17 January 2026 but for platforms, the date may be as soon as 12 January 2026.
Papst provides a brief introduction to Edinburgh Worldwide before highlighting how the board has proactively addressed a period of poor performance. This included enhancing the investment team and meaningful improvements in portfolio construction and execution, such as fewer holdings and stricter measures to address underperforming investments. The portfolio was reshaped to include more profitable, cash-generative companies and to have greater sector diversification. These efforts have led to notably better performance.
Attention then returns to the pressing issue of Saba. Edinburgh Worldwide’s board strongly urges all of its shareholders, no matter how large or how small, to vote against Saba’s proposal to take control of the trust in a move that would favour Saba over the trust’s existing shareholders. Saba has not stated its intentions, beyond replacing the board, and has failed to engage, including a lack of response to a list of questions in Edinburgh Worldwide’s open letter on 30 December 2025.
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About 'Uncovering Trusts'
Uncovering Trusts is a podcast run by Edison analysts, released every two weeks. Subscribe to hear analyst interviews on how investment trusts maximise returns while managing risks for investors.
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Edison covers 50+ investment trusts, read about them here: https://www.edisongroup.com/equities/investment-companies/
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Transcript
Introduction to 'Uncovering Trusts' and Edinburgh Worldwide
00:00:05
Speaker
Welcome to Uncovering Trusts, a podcast by Edison Group. I'm your host, Neil Shah, and today I am joined by Milos Papps, Director of Investment Company Content at Edison, who will talk about Edinburgh Worldwide Investment Trust, ticker EWI. Milos, thanks for joining us today.
00:00:20
Speaker
Thanks for having me. ah We have again scheduled a timely discussion on Edinburgh Worldwide as for the second time the company is under attack from US-based activist hedge fund, Saba Capital Management.
00:00:32
Speaker
ah The last requisition meeting took place in February 2025 Saba was soundly beaten. This time around, it is even more important for Edinburgh Worldwide's owners to vote ahead of the January 2026 general meeting, no matter how large or small they shareholding, as they will determine the future of their company.
History and Strategy of Edinburgh Worldwide
00:00:55
Speaker
Okay, so as a refresher, can we start with just a brief introduction to Edinburgh Worldwide? Of course, ah the t trust was launched in July 1998 and is listed on the main market of the London Stock Exchange.
00:01:09
Speaker
Managers Douglas Brody, um Luke Ward and Svetlana Viteva at Bailey Gifford aim to generate long-term capital growth from a diversified portfolio of smaller cap global equities. Although the trust has a global remit, most of the portfolio is made up of US-based companies and of particular interest is that up to 25% of the portfolio at the time of investments may be in unlisted businesses.
00:01:36
Speaker
The managers invest for the long term, so some of the listed companies have been in the portfolio since their original entry as private businesses.
Challenges and Changes in Edinburgh Worldwide
00:01:44
Speaker
What else is important background information, Milos?
00:01:48
Speaker
Well, ah there was a disappointing three-year period where the Trust did not meet its objectives and lacked the performance of its peers. Edinburgh Worldwide faced small-cap growth-style headwinds during a period of negative market sentiment, which was exacerbated by geopolitical events and a tighter monetary policy following the global pandemic.
00:02:09
Speaker
Investors became even more short-term focused and favored larger companies with more predictable earnings, while higher interest rates put pressure on growth company valuations.
00:02:21
Speaker
And how was this underperformance addressed by the team? ah Following a thorough collaborative review by the board and the managers, in November 2024, the board announced plans to reset the trust on a path for growth.
00:02:34
Speaker
These included enhancing the investment team, rebalancing the portfolio to increase focus and resilience, and an evolution in investment policy to broaden access to a wider universe of global small-cap companies. The board also committed to improving liquidity by continuing share repurchases and a potential capital return program of up to £130 million. pounds Luke Ward and Svetlana Viteva were appointed as co-managers alongside Douglas Brody.
00:03:04
Speaker
They have been involved with the management of Edinburgh Worldwide since 2017. Meaningful improvements in portfolio construction and execution were implemented, including fewer holdings, 78 at the end of April 2025 compared to 106 a year before, and stricter measures to address underperforming investments.
00:03:25
Speaker
The portfolio was reshaped to include more profitable cash-generative companies and have a greater sector diversification. um These efforts have led to notably better performance.
00:03:37
Speaker
Can you bring the portfolio to life by highlighting some of the holdings?
Major Holdings and Their Impact
00:03:41
Speaker
Yes, of course. um Looking at some of the largest positions, the number one holding is SpaceX, a private company owned by Elon Musk.
00:03:49
Speaker
I'm sure most of our listeners are familiar with the company, but just to remind them, SpaceX is an aerospace and space transportation company, manufacturing advanced rockets and satellites, providing global broadband services.
00:04:02
Speaker
ah The position was reduced in October 2025, presumably to lower the single stock exposure and to help fund share buybacks and reduce gearing. But SpaceX's portfolio share increased in mid-December 2025 due to a meaningful valuation uplift following an external transaction in its shares.
00:04:21
Speaker
um Another of the Trust's private investments is SciQuantum, which is building the world's first commercially viable quantum computer. um Although its business is at an early stage, there is interesting potential in areas including atomic level materials simulation and complex financial modeling.
00:04:40
Speaker
L-nylam Pharmaceuticals is a listed US biotech company with a dominant position in therapeutic gene silencing. ah The company has an adaptable and repeatable process which can be applied to any gene, affording L-nylam the ability to target larger disease populations including Alzheimer's, um diabetes and chronic heart failure.
00:05:01
Speaker
And then Accent Enterprise is a listed business selling tasers and body cameras to global law enforcement agencies. um And the company is expanding into drone based and counter drone technology.
00:05:12
Speaker
And it's a good example of an investment that possesses the attributes of Edinburgh Worldwide's most successful investments. And then finally, Exact Sciences is a listed molecular diagnostic business focused on cancer.
00:05:25
Speaker
um Its main product, ColoGuard, is the US market leading non-invasive test for colorectal cancer. um The company has big growth ambitions to develop and commercialize tests across many solid tumor states from early detection to post-treatment monitoring.
00:05:42
Speaker
Thank you for that rundown, Milos. Now let's move on to the more pressing issue of the Edinburgh edinburgh Worldwide being attacked from Sabah once more. Do you want to give us a little bit of background on this?
Saba Capital Management's Challenge
00:05:54
Speaker
Yes, with pleasure. um In December 2024, the Trust was one of seven investment companies that came under fire from US activists, Saba Capital Management, for poor investment performance. ah Saba proposed removing Edinburgh Worldwide's independent board and replacing it with two non-independent directors, changing the management of the company from Bailey Gifford to Saba and amending the investment strategy.
00:06:18
Speaker
um At the time of the Saba approach, the Trust's board had already implemented proposals to improve performance. And what was the outcome of Saba requisitioning a meeting with the Trust and what has happened subsequently?
00:06:31
Speaker
Well, in nutshell, it was a resounding success for Edinburgh Worldwide. In February 2025, 64.7% of the share base cast a vote with voting against saba um this number rose to when the votes and its associates were excluded.
00:06:49
Speaker
ah Unfortunately, that was not the end of the matter as Edinburgh Worldwide is once again under fire. On the 3rd of December 2025, the trust received a requisition notice from Saba seeking to remove all of its six independent non-executive directors and replace them with three US-based Saba-nominated individuals.
00:07:07
Speaker
So what was the board's response to this second Saba approach? um Edinburgh Worldwide's board strongly urges its shareholders to vote against Saba's proposals to take control of the trust.
00:07:19
Speaker
um It stresses the increased importance versus the last vote as Saba now holds around 30% of the trust compared to around 25% at the time of the first approach. um The board believes that Saba is trying to take control of Edinburgh Worldwide in the move that would favor Saba over the trust's existing shareholders.
00:07:37
Speaker
Saba has not stated intentions beyond replacing the board and has failed to engage.
Performance Improvements and Board's Response
00:07:43
Speaker
What's happened since Edinburgh Worldwide's board took steps to improve the Trust's performance?
00:07:48
Speaker
Initial results are encouraging as performance has improved. um In the last 12 months to the end of November 2025, the Trust generated an NAV total return of 16.2% versus a 6% total the return in the benchmark S&P Global Small Cap Index.
00:08:05
Speaker
Edinburgh Worldwide currently has the highest 12-month NAV total return of the five funds in the AAC global smaller company sector and also an enhanced share repurchase program has contributed to a narrower discount which is ah the second lowest in the trust's AAC sector.
00:08:22
Speaker
um Edinburgh Worldwide's board is urging Sabah to explain its intentions to the trust shareholders beyond replacing the board to allow them to make an informed choice rather than face uncertainty if Sabah's bid approach is successful.
00:08:33
Speaker
ah The board has made numerous efforts to engage with Saba to understand its intentions and to propose initiatives that would be in the interest of all of the trust shareholders. These include a tender offer and the possible merger with Baby Gifford's growth trusts, ticker USA.
00:08:50
Speaker
ah Saba has rejected trust proposals. On the 30th of December 2025, Edinburgh Worldwide's Board issued an open letter to Saba requesting clarity on the replacement of the trust's board with three US-based directors.
Board's Call for Shareholder Support
00:09:03
Speaker
The letter includes a list of specific questions about the three proposed directors and the intended mandate for the trust with a request that answers were received by the 5th of January, 2026. At the time of recording this podcast, on the 6th of January, there has been no official news release regarding Saba's detailed response to Edinburgh Worldwide's open letter.
00:09:22
Speaker
So just to reiterate the main message, what should shareholders do about Sabah's approach? Edinburgh Worldwide's shareholders should cast their votes. If they wish to retain access to the Trust's unique portfolio of long-term growth opportunities, they need to vote against Sabah's proposals.
00:09:39
Speaker
Time is of the essence, as the Trust's general meeting is scheduled for noon on the 20th of January, 2026. The cutoff for submitting votes is noon on Saturday, the 17th of January, but for platforms the date may be as soon as the 12th of January.
00:09:54
Speaker
Milos, thank you for revisiting Edinburgh Worldwide at such an important time for this interesting trust which provides investors with a broad exposure to both public and private long-term growth opportunities.
00:10:06
Speaker
You've been listening to Uncovering Trust, a podcast by Edison Group. If you want to find out more about Edinburgh Worldwide Investment Trust and other investment trusts we cover, please visit the Edison Group website at www.edisongroup.com.
00:10:20
Speaker
Thank you.