SCHEDULE 13D/A: Saba Capital Increases Stake in Neuberger Berman Connectivity Fund, Pushes for Board Declassification

Saba Capital Management, L.P. has increased its beneficial ownership in Neuberger Berman Next Generation Connectivity Fund Inc. to 9.69% and submitted a shareholder proposal to declassify the fund's Board of Directors.

Summary

• Saba Capital Management, L.P., Saba Capital Management GP, LLC, and Boaz R. Weinstein (collectively, the "Reporting Persons") have filed an Amendment No. 6 to Schedule 13D, disclosing their increased beneficial ownership in Neuberger Berman Next Generation Connectivity Fund Inc.
• The Reporting Persons collectively beneficially own 7,632,065 Common Shares, representing 9.69% of the Issuer's common stock outstanding.
• This percentage is calculated based on 78,761,496 shares of common stock outstanding as of October 31, 2024, as disclosed in the company's N-CSR filed on January 6, 2025.
• A total of approximately $85,431,950 was paid to acquire the Common Shares reported in this filing.
• Funds for the purchases were derived from subscription proceeds from investors, capital appreciation, and margin account borrowings.
• Saba Capital, on behalf of Saba Capital Master Fund, Ltd., sent a shareholder proposal to the Issuer on March 5, 2025, requesting the Board to take all necessary steps to declassify the Board so that all directors are elected on an annual basis, starting at the 2026 annual meeting of shareholders.
• The proposal specifies that declassification should not affect the unexpired terms of previously elected directors.
• Transactions in Common Shares by Saba Capital between February 25, 2025, and March 5, 2025, were all open market purchases, with prices ranging from $12.72 to $13.27 per share.

Sentiment

Score: 7

Explanation: The filing indicates significant activist investor interest and a push for enhanced corporate governance, which can be viewed positively by shareholders seeking greater accountability and potential value creation. While not a direct financial performance report, the activist engagement suggests potential for future strategic shifts.

Positives

• The increased stake by an activist investor like Saba Capital may signal a belief in undervalued assets or potential for improved corporate governance and shareholder returns.
• The shareholder proposal to declassify the Board could lead to enhanced accountability and responsiveness of the Board to shareholder interests, potentially improving long-term value.

Future Outlook

Saba Capital has submitted a shareholder proposal for the Issuer's 2026 annual meeting, requesting the Board of Directors to take all necessary steps to declassify the Board, ensuring all directors are elected annually. This indicates a future focus on corporate governance changes.

Industry Context

This filing is characteristic of activist investor engagement in the closed-end fund space. Activist investors often target closed-end funds to address issues such as discount to Net Asset Value (NAV), corporate governance, or capital allocation strategies. The push for board declassification aligns with broader corporate governance trends advocating for increased board accountability and shareholder democracy.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased influence over the Board and corporate strategy through annual director elections, which could lead to improved governance and potentially enhanced shareholder value.
• Board of Directors: Direct impact on the election process and tenure, requiring all directors to stand for election annually, increasing accountability to shareholders.

Next Steps

• The shareholder proposal to declassify the Board will be presented at the Issuer's 2026 annual meeting of shareholders.
• Saba Capital representatives are available for teleconference discussions with the Fund regarding the proposal on March 17, 18, and 19, 2025.

Key Dates

Recommendation

Keywords

Saba Capital Management, Neuberger Berman Next Generation Connectivity Fund, Schedule 13D/A, Activist Investor, Board Declassification, Corporate Governance, Shareholder Proposal, Common Shares, Investment Fund, Closed-End Fund