Even as Britain was covered in a treacherous frost last week, Jonathan Simpson-Dent ran one of his fastest times. “I did a sub-1 hour, 40-minute half-marathon distance,” he said.
“It’s a symbol of my anger at the personal assault I’m facing,” said Simpson-Dent.
The 59-year-old is not boasting but explaining his reaction to an onslaught by an American hedge fund over his role as chairman of the Edinburgh Worldwide Investment Trust (Ewit).
The City is agog at the level of mudslinging by Boaz Weinstein, a poker-playing chess master whose Saba Capital has forced a vote at the £785 million investment trust on January 20 to kick out every member of the board.
As far as Simpson-Dent is concerned, Weinstein is trying to “undermine his reputation” with what he regards as unfounded accusations about one of his previous roles, at the home repair business HomeServe. Weinstein is also threatening legal action unless the trust provides more information about the timing of a sale of part of its stake in SpaceX, Elon Musk’s rocket business. Saba reckons this sale cost Ewit shareholders £37 million.
“We’ve got nothing to hide and nothing to be ashamed of,” said Simpson-Dent.
Weinstein has threatened Edinburgh Worldwide Investment Trust with legal action over its SpaceX stake sale
CHANDAN KHANNA/AFP
In an attempt to prove his point, he took the unusual decision of holding a Q&A session with Ewit shareholders on Friday as he embarked on a last-ditch effort to get the 24,000 retail investors who own half of the investment trust to turn out to vote.
Without the support of retail investors, who rarely vote at shareholder meetings, Simpson-Dent’s future as chair of the trust looks bleak. “He [Weinstein] has got a good chance of taking control of this vehicle,” said Simpson-Dent, who wants to warn shareholders that he would be doing so “on the cheap”.
Saba has a 30 per cent stake in Ewit and the vote is based on a simple majority of those who cast ballots. In February last year, Saba’s first attempt failed after the trust rallied its retail investors to vote: aside from Saba, 64.7 per cent voted; of those, 63.8 per cent voted against.
Since then, Saba’s stake has increased by five percentage points — so, mathematically, the vote will be tighter.
“We’ve got to get 12,000 people out to vote [against Saba],” said Simpson-Dent. “There’s a distinct scenario that he could grab control of the trust even though we can only mobilise 10,000 rather than 12,000 people.”
The Edinburgh offices of Baillie Gifford, which manages the trust
REUTERSSELL CHEYNE/REUTERS
To understand the row, it is important to grasp how investment trusts operate. They are listed on the stock market and overseen by a board of directors, but the investments they make are decided on by fund managers. In Ewit’s case, the trust is managed by Edinburgh-based Baillie Gifford, known for its stock-picking in technology companies.
When the investments hit rough patches, trusts can trade on the stock market at a discount to the value of their investments. It is this gap on which Saba has been capitalising — by buying trusts at discounts and making a profit as the gap narrows when performance improves. It has stakes in about 30 trusts.
Another trust in which Saba has a 30 per cent stake, Herald, on Friday tried to go on the offensive by offering Weinstein an opportunity to cash in its stake through a tender offer.
Simpson-Dent does not dispute the dire performance of Ewit between 2021 and 2023, when the discount at which it trades reached almost 24 per cent. He joined the board in 2020 but became chairman in 2024 when he instigated a review, after which the trust cut the number of its investments from a potential 125 to a maximum of 100. Ballie Gifford retained management of the trust but two new fund managers were appointed.
The chair of Ewit uses this experience to counter Weinstein’s assertions that he is merely a “pawn” in thrall to Baillie Gifford. On the contrary, he said, he is regarded by Baillie Gifford’s managers as “not quite the devil incarnate” but “a very difficult person” when he was conducting the review.
He argues that since the review in 2024, the performance has improved and the discount is now 5.5 per cent.
Simpson-Dent said Ewit’s performance has improved since he became chairman and began a review
JOSHUA BRATT FOR THE SUNDAY TIMES
Simpson-Dent is facing difficult questions from Saba about the sale of a third of Ewit’s stake in SpaceX in October, just months before the rocket company was valued at $800 billion. “I can understand why people are saying the optics don’t look very good,” he said.
Saba is asking whether this stake was sold to facilitate a merger with another trust run by Baillie Gifford, the US Growth Trust. Saba opposed this merger.
• Baillie Gifford under fire again after £1.5bn merger blocked by Saba
Simpson-Dent said the sale was “nothing to do with the merger” and insisted the position was cut because the trust risked having too much of its investments in one company; it was going to reach above 20 per cent and even now makes up 16.5 per cent of its holdings.
He said he was “not allowed to talk about the valuation because we are under a shareholder agreement with SpaceX” and said decisions to boost the stake in SpaceX in previous years would “comfortably outweigh the numbers that [Saba’s] bandying around”. He insisted: “This has been a super-successful investment where shareholders are in the money to the tune of ten times their original investment.”
Indeed, SpaceX has astonished the world by winning contracts with Nasa and launching more than 10,000 satellites, massively bringing down the cost of space travel in the process. It is widely tipped to list its shares on the stock market this year in an initial public offering that could value it at $1.5 trillion (£1.1 trillion) — hence the suggestion that Ewit blundered by selling down its stake too early.
Elon Musk’s SpaceX has, says Simpson-Dent, been “a super-successful investment”
ADREES LATIF/REUTERS
So strong are the attacks on Simpson-Dent that Saba has even accused him of using disappearing WhatsApp messages with his counterpart at the US Growth Trust — although he holds up his phone to show this is not the case.
Saba is also alerting Ewit shareholders to Simpson-Dent’s role at HomeServe, which was slapped with a big fine by the Financial Conduct Authority in 2014 over its treatment of customers. Simpson-Dent was finance director for two years until 2009, working for the founder Sir Richard Harpin. “When the FCA did their investigation, which was a while after I left, they never tried to contact me or mentioned me in any reports. If they’d come to me to unpick my involvement in that, it would be a very different story,” Simpson-Dent said.
He has failed to secure a personal meeting with Weinstein although has met his close associate, Paul Kazarian. He said he cannot establish what Saba would do with the trust if it achieved its goal of voting off all the board members.
Last time around, Saba said it would use Ewit to buy up other trusts. Simpson-Dent urged the hedge fund to “stop slinging mud” as this was “distracting from the big issue here, which is: have you got a better plan to deliver shareholder value?” Saba has said its new board of directors would decide the trust’s future direction.
In ten days’ time, Simpson-Dent will know his fate. “I will gladly walk away from Edinburgh Worldwide if that’s what the majority of shareholders want. But that’s not what they said last February … If we can get people out to speak up, I feel absolutely confident that we will win.”