Elliott’s Edinburgh raid must be closely watched, says ALEX BRUMMER

There’s a lot to not like about activist investors. Not least the use of complex financial instruments to force listed companies to change, leaving voting shareholders on the reserve bank.

But dissidents can be useful in driving change and driving up the stock price. Nelson Peltz’s presence as an activist on the Unilever board drives real change.

Elliott may have made the wrong choice in pursuing Emma Walmsley’s departure from GSK, but his push was instrumental in accelerating the divestiture of consumer medicines business Haleon.

Similarly, a recent comment on electronics group Currys was abandoned, but showed an undervaluation.

The latest Elliott target is different. The attempt to force a shake-up at the £12.2 billion Scottish Mortgage Investment Trust (SMIT) – Britain’s largest, with a large private investor base – should be closely watched.

SMIT is managed by Edinburgh’s financial elite at Baillie Gifford and has built a stellar record of returns of 300 percent over the past decade. When interest rates rose in recent years, SMIT lost its appeal.

Nevertheless, it’s worth noting that the second-largest holding, accounting for 7.9 percent of the fund, is chipmaker Nvidia. It is the flavor of the year because of its artificial intelligence (AI).

The SMIT discount on asset values ​​rose to 13 percent at one point.

The normally tame sector received a shock 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 was subsequently reduced to 8pc, following a promise to buy back shares.

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

There are also questions about how the company plans to raise the money to carry out up to £1bn of share buybacks.

Elliott’s mere presence on the share register means Dowley and his company are looking over their shoulders.

When Elliott last showed interest in the sector at Alliance Trust in 2010-2017, it culminated in the departure of CEO Katherine Garrett-Cox.

Elliott boss Paul Singer is rarely a friendly boarder who is just there for the ride.

The Gaza meltdown

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

“You have to take geopolitics out of the boardroom,” he said during the fishing special at Trevini in Palm Beach. “Ben & Jerry’s job is to sell ice cream, not to make political statements.”

Anyone who wants to understand why Unilever is fed up with ice cream does not need to read any further.

Every action has consequences and the risk for Britain, if ice causes the split, is that the stock market goes to Amsterdam.

Hein Schumacher, the Dutch CEO of Unilever, says that the Netherlands has ‘a good chance’ of securing the IPO.

The Dutch government is not letting these opportunities fade away and insists that Unilever fulfills its promise four years ago that it would choose the Netherlands if it were to drift away from food products.

Britain, concerned about the London Stock Exchange leak, should fully engage. There’s no sign of that yet.

NatWest goodies

Relief! It’s taken a hell of a long time, but the government has finally taken over at NatWest, with taxpayers now down to 29.8 per cent, down from a peak of 84 per cent at the time of the 2008 bailout.

Now that that is done, the government must expedite a promised public offering. If it is to have any hope of attracting the ‘Sids’ – private investors – incentives will be needed.

This could include bonus shares for new shareholders who hold on for at least a year, and discounts for NatWest colleagues and customers.

After all, the public is only offered money-back refunds.