BlackRock Responds to Saba’s Attack on Capital

Recently, BlackRock Inc. sent a striking message to its clients, deviating from the usual formal tone to deliver what can only be described as a rallying cry. The headline blared, “Your fund is under attack,” pointing fingers at Boaz Weinstein, a seasoned Wall Street manager, who alleges that pricing distortions in BlackRock’s funds and others are costing investors billions. This has sparked a crusade for Weinstein, culminating in his hedge fund, Saba Capital Management, launching a vigorous bid to oust BlackRock as manager of six funds overseeing approximately $10 billion.

The clash prompted BlackRock to issue a note to its clients, warning of potential disruptions to the funds’ objectives and strategies should Saba succeed in its bid. This battle has transformed the typically placid $250 billion closed-end fund industry into a stage for a high-stakes power struggle, with shareholder meetings looming next month.

Weinstein accuses BlackRock of ensnaring shareholders with underperforming products and obstructing his attempts to elect new Directors, while BlackRock highlights Weinstein’s own investment decisions, questioning their alignment with fund objectives. Both sides claim moral high ground, with Weinstein likening his tactics to audacious corporate raids of the past.