Jonathan Simpson-Dent, chairman of Edinburgh Worldwide Investment Trust (EWIT), has criticised UK regulator the Financial Conduct Authority (FCA) for failing to act decisively against activist hedge fund campaigns, according to a report by The Times.

Simpson-Dent has warned that inaction could encourage similar attacks on other UK investment trusts and expressed frustration at comments by Simon Walls, the FCA’s director of wholesale markets, who recently indicated the regulator did not intend to interfere with what he described as the “rough and tumble” of activist investors. In response, Simpson-Dent published an open letter arguing that retail shareholders deserved stronger safeguards to protect against activists like Saba Capital, which has repeatedly sought control of EWIT.

EWIT, a £800m FTSE 250 trust, recently launched an exit tender offer after Saba acquired a roughly 30% stake and pursued multiple campaigns to replace the board. Most outside investors are expected to participate to prevent Saba from gaining control and altering the fund’s mandate.

Simpson-Dent argued that current rules leave trusts vulnerable, particularly where shareholder bases are dominated by retail investors who may not vote, allowing activist funds to effectively override the majority and impose board changes. He called for clearer regulatory guidance on board independence, conflicts of interest, and related-party transactions to preserve shareholder democracy.

The FCA said it continues to engage with the investment trust sector and is reviewing relevant rules, but noted that certain issues raised fall outside its current powers.