DEFA14A: ISS Backs BlackRock's Board Nominees, Rejects Saba's Proposals to Terminate Investment Advisory Agreements at Multiple Closed-End Funds

Institutional Shareholder Services (ISS) recommends shareholders vote for BlackRock's board nominees and against Saba Capital's proposals to terminate BlackRock as investment adviser at several closed-end funds.

Summary

• Institutional Shareholder Services (ISS), a leading independent proxy advisory firm, has issued supportive reports for BlackRock and its Board nominees at several closed-end funds.
• ISS recommends shareholders vote against all proposals by Saba Capital Management to terminate BlackRock as investment adviser of multiple BlackRock funds, including BCAT, BFZ, BIGZ, BMEZ, BSTZ, and ECAT.
• ISS recommends shareholders vote for all BlackRock Board nominees at BCAT, BMEZ, BNY, and MPA.
• ISS recommends shareholders vote for Board nominee Arthur Steinmetz at both MHN and MYN.
• BlackRock highlights ISS's rejection of Saba's nominees at the majority of the funds.
• ISS acknowledges that BlackRock has improved returns and narrowed the discount to NAV at funds like BCAT and ECAT.
• BlackRock recently announced enhancements across its closed-end fund complex, including discount management programs, distribution increases, and fee waivers, providing $2.9 billion in liquidity.
• Shareholders are advised to use the WHITE proxy card to vote for BlackRock's nominees and disregard any gold proxy cards from Saba.

Sentiment

Score: 7

Explanation: The document presents a positive outlook due to ISS's support for BlackRock and the rejection of Saba's proposals. However, there are some acknowledged negatives and risks, preventing a higher score.

Positives

• ISS support for BlackRock's management and Board nominees.
• Rejection of Saba Capital's proposals to terminate BlackRock's investment advisory agreements.
• Improvements in fund performance, such as increased returns and narrowed discounts to NAV.
• Implementation of discount management programs, distribution increases, and fee waivers, providing $2.9 billion in liquidity.
• ISS acknowledges the potential lack of independence of Saba's nominees.

Negatives

• ISS did not support BlackRock's nominees at BIGZ and ECAT.
• The document acknowledges the potential lack of independence of Saba's nominees.

Risks

• Changes and volatility in political, economic, or industry conditions could impact the funds.
• The relative and absolute investment performance of the funds could affect demand.
• Increased competition could negatively impact the funds.
• Unfavorable resolution of legal proceedings could adversely affect the funds.
• Technological changes could have an impact on the funds.
• Legislative and regulatory actions could affect the funds.
• Terrorist activities, international hostilities, health epidemics, and natural disasters could impact the funds.
• BlackRock's ability to attract and retain talented professionals is a risk.
• Problems at other financial institutions could impact the funds.

Future Outlook

The press release contains forward-looking statements regarding BlackRock's and the funds' future financial or business performance, strategies, or expectations, which are subject to numerous assumptions, risks, and uncertainties.

Management Comments

• R. Glenn Hubbard, Chair of the Boards of BlackRock Closed-End Funds, stated that the ISS recommendations speak to BlackRock's depth of investment experience and the Boards track record of stewardship.
• Hubbard added that BlackRock believes its nominees are the right stewards to represent all shareholders.

Industry Context

This announcement reflects the ongoing activist investor activity in the closed-end fund space, where firms like Saba Capital seek to influence fund management and governance. The outcome of these proxy battles can significantly impact fund strategies and shareholder value.

Comparison to Industry Standards

• The document mentions Liberty All-Star Growth Fund, Inc. (ASG) as a comparable fund for BIGZ, noting that BIGZ's distribution rate has exceeded that of ASG.
• The document states that BCAT trades at a narrower discount to NAV than peers.
• The document states that ECAT has narrowed the NAV discount, bringing the measure in line with peers.

Stakeholder Impact

• Shareholders are impacted by the proxy vote outcomes, which can influence fund management and strategy.
• BlackRock's employees are impacted by the outcome of the proxy vote, as it affects the stability of their employment.
• The outcome of the proxy vote can impact the funds' investment strategies and performance, affecting investors.

Next Steps

• Shareholders are encouraged to vote using the WHITE proxy card.
• Annual meetings of shareholders will be held on various dates in June 2024 for different funds.

Key Dates

Keywords

BlackRock, Saba Capital, ISS, proxy, closed-end funds, investment adviser, board nominees, shareholders, BCAT, BMEZ, BNY, MPA, MHN, MYN, BFZ, BIGZ, BSTZ, ECAT