Boaz Weinstein's Saba Capital detailed its plan for change at 10 BlackRock closed-end funds that trade at a steep discount to net asset value and are underperforming their peers.The activist fund wants to offer investors the chance to sell out of the funds at the price their shares are worth, and to institute broader governance changes.
BlackRock"is talking out of both sides of its mouth" by doing this, Saba says. That's cost retail investors $1.4 billion in discounts, by Saba's math, on top of the management fees it charges.BlackRock, Saba says in the deck,"considers itself a leader in governance, but is crushing shareholder rights." At certain BlackRock funds, for example, if an investor doesn't submit their vote in a shareholder meeting, their shares will automatically go to support BlackRock.
"Investors who want to come out come out, and those who want to stay will stay for a hundred years, if they want," Weinstein told CNBC earlier this week. At the worst-performing funds relative to their peer group, Saba is seeking shareholder approval to fire the manager. In total, BlackRock wants new management at six funds, including the BlackRock California Municipal Income Trust , the BlackRock Innovation and Growth Term Trust and the BlackRock Health Sciences Term Trust .
A BlackRock spokesperson told CNBC that the firm has historically taken steps to improve returns at closed-end funds when necessary.
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Source: NBCLA - 🏆 319. / 59 Read more »