(Jan 21): BlackRock Inc reached an agreement to repurchase shares of two of its largest closed-end funds, following a multiyear campaign by Boaz Weinstein’s Saba Capital Management arguing the vehicles performed poorly and harmed investors.

The world’s largest asset manager said its Innovation and Growth Term Trust, with about US$1.8 billion (RM8.05 billion) of assets, and Health Sciences Term Trust, with US$1.7 billion, entered a “standstill” agreement with Saba, BlackRock said Tuesday in a statement. The firm announced a tender offer to repurchase shares at close to their net asset value.

Weinstein wrote in a post on X that the changes were made after “constructive discussions with BlackRock” and that “by committing to shareholder-friendly initiatives, liquidity events and governance enhancements, value can be unlocked for all investors”.

As part of the three-year agreement, Saba will withdraw shareholder proposals that sought to shake up the boards of the fund and vote shares it holds in line with the board, according to the statement. The tender offer is to repurchase 50% of BIGZ’s outstanding shares and 40% of BMEZ’s shares, in each case at a price of 99.5% of the net asset value.

Saba and activist hedge funds have targeted closed-end funds that trade at prices below their NAV, buying shares in the vehicles and pressuring managers to close the discount.

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