Wall Street Fund Blocks Baillie Gifford Merger Amid Activist Clash With Edinburgh Giant

Baillie Gifford has come under fresh pressure as the hedge fund Saba Capital, led by Boaz Weinstein, has scuppered its proposed merger of the US Growth Trust and the Edinburgh Worldwide Investment Trust. The move intensifies a public dispute between the American activist investor and the venerable Scottish asset manager, with allegations now circulating that Saba is seeking to gain control of the Edinburgh trust for its own commercial advantage. Saba, which has accumulated a 25 percent stake in Edinburgh Worldwide and 28 percent in US Growth Trust, withheld support for the deal and used its substantial influence to criticise Baillie Gifford’s recent management and outcomes.

The rejection of the merger has denied Baillie Gifford the opportunity to consolidate two funds under its management; the intended merger would have combined Edinburgh Worldwide’s £850 million of assets, which include a significant holding in Elon Musk’s SpaceX, with the £890 million managed by the US Growth Trust. The latter fund’s portfolio features stakes in major American technology names including Amazon, Meta, Netflix, and Nvidia.

Baillie Gifford executives argue that opposition to the merger will disadvantage existing shareholders by denying them a chance to exit, while simultaneously thwarting the creation of a larger entity with a focus on high-growth US firms. Commenting on the development, the chairman of Edinburgh Worldwide, Jonathan Simpson-Dent, claimed that Saba’s actions reflect an agenda designed to secure control at the expense of the remaining shareholders.

Saba Capital has publicly lambasted what it perceives as entrenched management, stating that the merger would have benefited Baillie Gifford rather than the broader shareholder base. According to a Saba spokesperson, the board’s alignment with management over shareholders underscores the need for more accountability and transparency. The hedge fund’s campaign against Baillie Gifford features sharp critiques of performance across more than a dozen UK investment trusts, which Mr Weinstein has described as underwhelming or worse.

This dispute marks an escalation in hostilities between a prominent Wall Street activist and one of the United Kingdom’s most significant investment institutions. Baillie Gifford, founded in Edinburgh and currently overseeing over £200 billion in assets, has managed the Edinburgh Worldwide Investment Trust since 1998, targeting innovative companies in global markets.

The failed merger highlights ongoing tensions within the UK investment landscape, as activist shareholders press for reforms and challenge established managers on returns, governance, and accountability.