BlackRock is committed to delivering value for shareholders
Saba claims that BlackRock CEFs are not performing as they were intended because they sometimes trade at a discount to net asset value.
The truth
It is factually inaccurate to say that BlackRock Funds are underperforming. Quite the opposite. See below for our Funds’ performance metrics:
- The CEF market, like other markets, is cyclical and funds may trade at a premium or discount to net asset value over time. We've seen such a discount cycle play out during the past 18 months. What doesn’t change is the steady income CEFs are designed to provide.
- Additionally, BlackRock has taken steps to narrow the discount of these Funds through share repurchases, distribution increases and implementation of discount management programs (“DMPs”).
- In May 2024, we announced distribution increases across muni CEFs and for certain term CEFs, as well as fee waivers and a one-time $2 million management fee waiver for all muni CEFs.1 We also announced DMPs for 14 of our CEFs.2
- Our Funds have also repurchased $1.3 billion in shares, generating significant gains to shareholders through NAV accretion.3 We are focused on helping shareholders reach their financial goals.
Saba’s walk doesn’t match its talk
Saba claims to be a better CEF manager than BlackRock.
The truth
- Experience matters. BlackRock has a 35+ year history managing CEFs and an established track record of delivering long-term value.
- In contrast, Saba has never launched a CEF—just taken them over—and has exposed their funds’ shareholders to riskier assets, like SPACs, or forced liquidity events, potentially leaving them with a fund that no longer serves their long-term financial goals.
- Additionally, both funds Saba took over have traded at discounts and have underperformed under Saba’s management.
- During negotiations with Saba, our Funds' Board's made multiple offers that would have provided liquidity for all shareholders. However, Saba refused these offers and it became clear that what they really wanted is control of your Funds.
- Saba’s playbook is dependent on loopholes that allow well-funded activists to buy large positions in CEFs and then use their significant voting power to push for self-serving changes—violating the spirit of the ’40 Act while remaining technically compliant.
There is no $1.4B “magic button”
Saba claims that with a “press of a button” BlackRock can magically create $1.4 billion in immediate value and that open-ending these Funds would benefit shareholders in the long term.4
The truth
- There is no magic button and statements to the contrary are misleading at best. One of the key advantages of CEFs is their ability to hold greater concentrations of illiquid assets and certain asset classes, like private investments, that are generally not otherwise available to retail investors.
- Unwinding these types of investments suddenly could cause a Fund to sell assets at lower prices and potentially incur tax consequences. We believe that the short-term benefit of any such action is far out outweighed by the long-term consequences such actions could have for a Fund’s shareholders and their investment options going forward.
- “Open-ending” these Funds would negatively impact those features and effectively limit shareholders’ options when choosing investment vehicles.
Saba’s interests are not aligned with shareholders
Saba claims they act in the best interests of closed-end fund retail shareholders.
The truth
- Saba is a well-funded hedge fund beholden to their own sophisticated investor base. We believe Saba is not interested in helping CEF shareholders reach their long-term financial goals, as consistently demonstrated by their self-serving actions.
- Saba has chosen to use their vast resources to buy controlling stakes in CEFs, engage in costly proxy fights, and force actions that provide them with a quick profit at the expense of retail shareholders looking for stable income over multiple market cycles.
Many invest in CEFs for the stable, consistent income they may offer
Saba claims that closed-end fund (CEF) investors would prefer one-time payouts over stable income and the other benefits CEFs provide.
The truth
- Closed-end funds offer access to asset classes otherwise unavailable to retail investors and performance over multiple market cycles.
- CEF investors are often retirees or individuals planning for retirement, and they choose CEFs for the long-term, consistent income they are designed to provide.
- On the contrary, arbitrage investors like Saba are trying to take advantage of CEF market dynamics for a quick profit without concern for other shareholders.
We're here to help
For more information on your investment, email cef@blackrock.com. If you have any questions about the proposals to be voted, please contact Georgeson LLC (“Georgeson”), toll free at 1-866-920-4784.
