Elliott’s Edinburgh raid

There is much not to like about activist investors. Not least the use of complex financial instruments to bully listed companies into change, leaving voting shareholders on the subs bench.

But dissidents can be useful in agitating for change and lifting the share price. The presence of Nelson Peltz as an activist on the board of Unilever is stimulating real change.

elliott may have been wrong headed in seeking the departure of emma Walmsley at GSK but its pressure was helpful in speeding up the divestment of consumer medicines offshoot haleon.

Similarly, a recent tilt at electronics group Currys was abandoned but demonstrated an undervaluation.

The latest elliott target is different. The effort to force a shake-up at the £12.2bn Scottish Mortgage Investment Trust (SMIT) – Britain’s biggest, with a large private investor base – must be closely watched. SMIT is managed by the edinburgh financial elite at Baillie Gifford and has a tremendous record over the last decade with returns of 300 pc. As interest rates climbed over the last couple of years, SMIT lost its allure.

Nevertheless, it is worth noting that the second biggest holding, making up 7.9pc of the fund, is chipmaker Nvidia. It is flavour of the year because of its artificial intelligence (AI) capacity.

The SMIT discount to asset values widened at one stage to 13pc.

The normally tame sector was rocked last year when chairman Fiona McBain was forced out of SMIT over governance and portfolio issues. She was replaced by City veteran Justin Dowley. The discount subsequently has narrowed to 8pc following a pledge to buy back shares.

As good as some of SMIT’s more experimental holdings have been, investment platform AJ Bell has described some of them, such as flying taxis, as ‘bonkers’.

There are also questions as to how it intends to raise the cash to conduct up to £1 bn of share buy backs.

The very presence of elliott on the share register will keep Dowley and company looking over their shoulder.

When elliott last showed an interest in the sector at Alliance Trust in 2010-17 it culminated in the departure of chief executive Katherine Garrett-Cox.

elliott boss Paul Singer rarely is a friendly boarder simply there for the ride.

Gaza meltdown

WANT to know how activists can make a difference? Then read Nelson Peltz’s views at his lunch with the FT.

‘You’ve got to get geo-politics out of the boardroom,’ he opined over the fish special at Trevini in Palm Beach. ‘Ben & Jerry’s job is to sell ice cream, not make political statements.’

Anyone seeking to understand why Unilever has had enough of ice cream should read no further.

every action has a consequence and the risk for the UK, when ice cream does the splits, is that the share listing goes to Amsterdam. Unilever’s Dutch chief executive hein Schumacher says that the Netherlands has ‘a good chance’ of capturing the initial public offering.

The Dutch government is not letting the opportunity melt and is insistent that Unilever follows through with its pledge four years ago that it would choose the Netherlands if it were to float off foods.

Britain, concerned about leakage from the London Stock exchange, should be fully engaged. No sign of that as yet.

NatWest goodies

PheW! It has taken a hell of a long time, but finally the Government is out of the driving seat at NatWest with the taxpayer’s holding down to 29.8 pc from the peak of 84 pc at the time of the 2008 bailout.

With that done, the Government needs to speed up a promised public offer. If it is to have any hope of bringing in the ‘Sids’ – private investors – there will need to be incentives. These might include bonus shares for new shareholders, for holding on for at least a year, and discounts for NatWest colleagues and customers.

After all, the public is only being offered a money-back return.