- Data indicated that BlackRock prevailed against hedge fund manager Boaz Weinstein last week in a vote by shareholders at four of its closed-end funds, maintaining the asset manager’s management and retaining its directors.
- With more than $10 trillion in assets under management, BlackRock stands as the largest asset management firm in the world.
- Saba wants investors to elect its candidates to the funds’ boards instead of the BlackRock directors. Additionally, it wants investors to remove BlackRock from certain of them as management.
- “Shareholders voted to support the Board’s nominees at several funds and rejected Saba’s efforts to unseat BlackRock as an investment adviser,” BlackRock Closed-End Funds Chair Glenn Hubbard said in a statement on Friday.
- “For the second year in a row, Saba has failed to convince shareholders that Saba will deliver more value than the funds’ current stewardship and management teams,” he said.
- In reaction to the vote on Monday, Saba said, “There is a great injustice that continues as BlackRock refuses to let its fund owners have their voices heard.”
- Saba has said that the funds, which together oversee almost $10 billion, need modification due to underwhelming performance.
- For a director to be elected, the BlackRock funds require that a majority of the outstanding shares—50% plus 1 share—be voted in their favor. Since no party was able to reach that threshold at multiple funds, the present directors will be retained and run for office again the following year.
- At none of the eight funds, Saba was able to remove the fund manager or change directors with sufficient votes.
- According to BlackRock, the official confirmation of the preliminary vote tally by the impartial inspector of elections is pending.
- Since closed-end funds don’t issue or redeem new shares like open-end funds do, their value might fluctuate above or below the value of the securities the fund owns.
- Saba has been arguing for months that investors stand to gain when the discount to the underlying assets of BlackRock funds narrows and that BlackRock ought to repurchase investor shares, which could unleash around $1.4 billion in value.
- BlackRock said that its directors are superior selections to Saba’s nominations and that it has taken steps to enhance performance.
- An often-overlooked aspect of the mutual fund industry is being brought to light by the conflict between BlackRock, which advises governments and manages money for retail investors and pension funds, and Weinstein. Weinstein and other well-known investors made headlines last year when they attempted to purchase hedge fund Sculptor Capital Management after it had agreed to sell to another investor.
- “Looking ahead, we plan to hold BlackRock accountable in court,” said Saba in a statement on Monday, after the company’s legal battle.
- JPMorgan Chase, Sidely Austin LLP, Stradley Ronon, Willkie Farr & Gallagher LLP, and Georgeson provided advice to BlackRock.
Source:
investing
