DEFA14A: BlackRock Defends Innovation and Growth Term Trust Against Saba Capital's Board Takeover Attempt

BlackRock urges shareholders to vote against Saba Capital's proposal to replace the board and terminate BlackRock's management of the BlackRock Innovation and Growth Term Trust (BIGZ), highlighting strong recent performance and potential risks associated with Saba's involvement.

Summary

• BlackRock is urging shareholders of the BlackRock Innovation and Growth Term Trust (BIGZ) to vote against proposals by activist hedge fund Saba Capital Management to install its own board nominees and terminate BlackRock as the fund's manager.
• BlackRock argues that Saba's actions threaten the fund's consistent monthly income and that the current board has delivered strong returns, especially after a rebound in 2023.
• BIGZ has shown strong performance, including a 13.0% return in Q1 2024 and a 19.2% return in 2023, outperforming many other closed-end funds.
• BlackRock highlights its discount management program, which has resulted in $177 million in shareholder profit since inception, with $35 million in shares bought back at a discount to net asset value.
• BlackRock warns that Saba's involvement could lead to wider discounts, higher fees, and riskier investment strategies, citing examples of funds Saba has commandeered.
• Shareholders are instructed to use the WHITE proxy card to vote FOR the BlackRock Board nominees and AGAINST Saba's proposal.
• BlackRock emphasizes that voting on the WHITE proxy card will replace any previously submitted proxy cards from Saba.

Sentiment

Score: 7

Explanation: The document conveys a positive sentiment regarding the fund's performance and BlackRock's management, while also expressing concern about the potential negative impacts of Saba Capital's involvement. The overall tone is defensive and proactive.

Positives

• BIGZ has demonstrated strong recent performance, with significant returns in both Q1 2024 and 2023.
• The fund has outperformed a large percentage of its peers in the closed-end fund market.
• BlackRock's active discount management program has created substantial value for shareholders.
• The fund provides access to private markets.
• BlackRock is actively working to protect shareholder interests against potential risks posed by Saba Capital.

Negatives

• Saba Capital Management is attempting to take control of the board, which BlackRock views as a threat to the fund's stability and performance.
• Saba's involvement could potentially lead to higher fees and riskier investment strategies.
• The fund launched in suboptimal market conditions.

Risks

• Saba Capital's proposed changes could lead to wider discounts to net asset value for the fund.
• There is a risk of increased fees if Saba gains control.
• Saba's investment strategies may be riskier and more speculative than BlackRock's current approach.
• Market conditions could change, impacting the fund's future performance.

Future Outlook

BlackRock expects its momentum to continue, aided by the strong growth potential of private equity as conditions improve.

Management Comments

• BlackRock believes that BIGZ has delivered strong returns for shareholders and continues to pay attractive monthly income.
• BlackRock expects its momentum to continue, aided by the strong growth potential of private equity as conditions improve.
• The Board unanimously recommends voting FOR the Boards Nominees, who have created value for all shareholders.
• The Board unanimously recommends voting AGAINST Sabas proposal to terminate the investment management agreement with BlackRock.

Industry Context

Activist investors like Saba Capital often target closed-end funds to unlock value by influencing management or forcing structural changes. This proxy fight reflects a broader trend of increased shareholder activism in the investment management industry.

Comparison to Industry Standards

• The document states that BIGZ outperformed 91% of all closed-end funds in Q1 2024 and 81% in 2023, suggesting a strong relative performance.
• Without specific benchmarks or comparable funds mentioned, it's difficult to provide a detailed comparison to industry standards.
• However, the document implies that BIGZ's performance is above average compared to its peers.

Stakeholder Impact

• Shareholders are directly impacted by the outcome of the vote, as it will determine the fund's management and investment strategy.
• The fund's performance affects the income and returns received by shareholders.
• Employees of BlackRock involved in managing the fund could be affected if Saba's proposal succeeds.

Next Steps

• Shareholders need to vote on the WHITE proxy card before the annual meeting on June 25.
• Shareholders are encouraged to contact Georgeson LLC with any questions.

Key Dates

Keywords

BlackRock, BIGZ, Saba Capital, Proxy Fight, Closed-End Fund, Shareholder Value, Board Nominees, Investment Management Agreement, Discount Management, Private Equity