Boaz Weinstein’s assault on City funds risks damaging the UK’s attractiveness to investors, the chairman of Edinburgh Worldwide Investment Trust (EWI) has said.

Jonathan Simpson-Dent, the chairman of EWI, has hit out at the US hedge fund tycoon as it rallies against an activist campaign from his firm, Saba Capital.

He said Mr Weinstein’s offensive against UK investment trusts risks impacting confidence in the investment sector, which could make it harder for trusts to attract employees.

EWI is among a group of trusts targeted by Mr Weinstein in the past year, as the American has sought to unseat a series of boards over poor performance.

Other trusts under pressure from Saba include Herald Investment and the Baillie Gifford US Growth Trust.

Tensions escalated with EWI last week when Saba, which owns 30pc of shares in the fund, threatened to sue if it failed to provide more information regarding its decision to sell down its stake in Elon Musk’s SpaceX.

Speaking to The Telegraph on Monday, Mr Simpson-Dent said: “This has been an unpleasant campaign. He said some nasty things and a lot of people don’t want that.

“If the candidate pool significantly diminishes because people see this as a really difficult and high-risk place to play personally, then I think that’s got some medium to long-term harm.”

Saba is proposing to remove all six of EWI’s independent non-executive directors and appoint three of its own US-based independent nominees. The resolutions will be put to a vote at the trust’s upcoming general meeting on January 20.

A victory for Saba would also send the wrong message about the UK, Mr Simpson-Dent added.

He said: “The UK equity markets are already under some element of stress and seeing outflows over the course of the last couple of years.

“It doesn’t send a great message that we’re open for business and the UK is a great place to come and invest.”

Rather than simply pressuring EWI to improve performance, Mr Simpson-Dent said he believes that Saba’s goal could be to take over the entire trust.

Mr Simpson-Dent said: “They’re really trying to build their franchise in the UK and they want to grab a platform vehicle to allow them to do that.”

The chairman of EWI added: “In this world of capital markets, if someone wants to take over something, they make an offer that would then be considered by boards and shareholders, usually at a premium to the current trading value.

“There’s inherent value in the portfolio that you’d expect them to be analysing to figure out what premium was merited, but they don’t want to, they just see an opportunity to get it on the cheap.”

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