By Svea Herbst-Bayliss
NEW YORK (Reuters) – BlackRock won a fight with hedge fund manager Boaz Weinstein this week when shareholders voted at four of its closed-end funds to keep the asset manager’s directors in place and retain it as the manager, new data released on Friday show.
Weinstein’s Saba Capital Management, a large owner in BlackRock’s closed-end funds, and BlackRock, the world’s biggest asset management company with more than $10 trillion in assets under management, have been locked in battle for months over the future of 10 BlackRock closed-end funds.
Saba wanted investors to replace the BlackRock directors by electing its nominees to the funds’ boards. It also wanted investors to fire BlackRock as manager at some of the funds.
“Shareholders rejected Saba’s efforts to unseat BlackRock as investment adviser and voted to support the Board’s nominees at several funds,” Glenn Hubbard, Chair of the Boards of BlackRock Closed-End Funds said in a statement. “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 added.
Saba was not immediately available for comment.
Investors voted at four BlackRock funds this week () after having voted at six (, and) last week.
Meetings at and have been adjourned until next month due to a failure to achieve quorum. Saba Capital Management did not secure enough votes to replace directors or fire the fund manager at any of the eight funds.
The preliminary vote count is subject to final certification by the independent inspector of elections, BlackRock said.
Saba has cited poor performance as the reason change is needed at the funds which jointly manage roughly $10 billion.
Closed-end funds, unlike open-end funds, don’t issue or redeem new shares, which can leave them trading above or below the value of the securities held by the fund.
For months, Saba has argued that investors will benefit when the discount to the BlackRock funds’ underlying assets is shrunk and that BlackRock should buy back shares from investors which could unlock some $1.4 billion in value.
BlackRock said it has taken action to improve performance and that its directors are better choices than Saba’s nominees.
The battle between BlackRock, which manages money for retail investors and pension funds and advises governments, and Weinstein, who most recently made headlines by last year when he and other prominent investors tried to buy hedge fund Sculptor Capital Management after the company agreed to sell to someone else, is shining light on an often overlooked part of the mutual fund industry.
Saba has taken the fight against BlackRock to court and key rulings came this week.
BlackRock was advised by JPMorgan Chase, Sidely Austin LLP, Willkie Farr & Gallagher LLP, Stradley Ronon, and Georgeson.
(Reporting by Svea Herbst-Bayliss; editing by Diane Craft)
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