Saba fails at Edinburgh Worldwide but investment trust activism endures

Activist investor Saba’s latest setback in its push for change in the investment trust universe is unlikely to be the end of the story. The disruptor has lost in its campaign to reform Edinburgh Worldwide but it still has holdings in plenty more trusts.

AJ Bell’s inaugural report on activists in the investment trust world shows Saba has stakes in 46, or approximately one in every six, UK-listed investment trusts.

Criticisms of Saba and other activists

Edinburgh Worldwide shareholders voted against Saba’s proposal to remove the current six independent non-executive directors and appoint three new directors. The trust argued that Saba was trying to gain control to prioritise its own commercial interests, rather than doing what was best for shareholders in the long term.

This is the second time in less than 12 months that Saba’s proposals have been rejected by shareholders in the trust, in which it has a 30% stake. It has outlined its disappointment with share price performance and criticised a lack of action to improve it.

There have also been suggestions that Saba’s interventions are undermining faith in the broader investment trust space. Trusts are having to spend heavily on defence measures to fight off Saba or other activists and that money might have been better spent on actual investments.

Despite these criticisms, it is clear activism remains at the top of the agenda with investment trusts. Just because Saba lost with Edinburgh Worldwide doesn’t mean it won’t achieve what it wants elsewhere. There are also investment trust activists beyond Saba hoping to make their mark.

The benefits of an activist investor

Widespread consolidation in the investment trust space can be attributed to activist involvement. We’ve also seen various manager changes. Boards have realised that trusts cannot limp along and hope for the best – when something isn’t working, the alternatives must be explored.

Saba has been the most vocal activist in the space. It typically targets trusts trading on a discount to the underlying value of their assets where performance has been lacklustre or poor. Its goal is to drive change, narrow discounts and wake up what it describes as sleepy boards.

While Saba has lost several high-profile campaigns to drive change in various trusts, the pressure it is exerting has resulted in change elsewhere.

For example, Saba recently convinced Terry Smith’s Fundsmith asset management business that its Smithson Investment Trust would be better off as an open-ended fund, something shareholders will soon be asked to vote on.

Speaking to AJ Bell in late 2025, Smith said: “Saba has been the trigger for this. That’s because what they are saying is something we agree with – they are right. Which is to say we launched this as an investment trust investing in small and mid-cap companies… but it hasn’t worked.”  

He added: “It has been trading at a persistent discount and when you’ve bought back 40% of the trust, which we have been doing, and it has not eradicated the discount, you need to do something different.”

Saba also persuaded CQS Natural Resources Growth & Income to buy out any shareholders seeking a full cash exit and reward remaining investors with a higher dividend yield and lower management fees.

Meanwhile Herald and Impax Environmental Markets are both trying to remove Saba from their shareholder registers via a tender offer, subject to a shareholder vote.

Who could be next?

Bankers Investment Trust is a potential candidate for a major Saba campaign, with the activist currently holding a 0.5% stake. It has underperformed over one, three, five and 10 years, and it trades on an 8.6% discount versus an average 8.0% discount for its sector*.

In 2025, Bankers proposed to change its rules in what looked like a defence against any potential activist campaign in the future. This included increasing the minimum number of directors and requiring independent shareholder approval for the appointment of directors proposed by significant shareholders. It withdrew the proposals following discussions with investors.

Scottish American could also be vulnerable to an activist campaign. It has underperformed the market over one, three, five and 10 years to the end of 2025 in terms of net asset value. Its shares trade on an 9.2% discount to net asset value versus a 3.1% average discount for the global equity income sector*.

Scottish American is managed by Baillie Gifford which runs various other trusts already subject to campaigns by Saba, including Edinburgh Worldwide. The activist might feel minded to turn the screws on Baillie Gifford given the latest Edinburgh Worldwide defeat.

*Source: AJ Bell, discount data AIC (14 January 2026), NAV performance data Morningstar (to 31 December 2025).

Want to know more: Read the Investment trusts versus activists report in full to learn about how activist investors are shaking up the investment trust industry.