Saba vs Closed-End Funds: Boaz Weinstein's Asset-Class-Wide Activist Campaign

The US closed-end fund industry holds roughly $250bn in assets. CEFs raise capital through an IPO and then trade in the secondary market, where the price can deviate from net asset value. Persistent discounts of 10 to 15 per cent are common because shareholders cannot redeem at NAV. For asset managers the CEF is an attractive permanent capital vehicle that generates stable fee income; for shareholders the chronic discount is a permanent destruction of value. Saba's campaign exploits that structural mismatch on an industrial scale, treating the wrapper itself, rather than any single fund, as the target.

CEFs are regulated under the Investment Company Act of 1940. The manager acts as adviser to the fund and is appointed by the board; independent trustees must constitute a majority of directors. In practice, trustees are typically selected on the recommendation of the manager and serve on the boards of dozens of related funds, a cluster board structure that critics have long argued produces de facto board capture. Saba's campaign is the first to take that critique to the asset class as a whole.

BIGZ is a BlackRock-managed closed-end fund that completed its IPO in March 2021, raising roughly $2bn at an offering price of $25.00 per share. The fund invests in small and mid-cap US innovation and growth equities, including some private and SPAC exposures, and is structured as a term trust with a scheduled termination date in March 2031. The 2022 and 2023 growth-equity sell-off compressed NAV sharply, and the market price traded at a 15 to 20 per cent discount through much of 2023. Saba began accumulating in 2023 and disclosed a position of roughly 15 to 20 per cent of outstanding shares in early 2024, demanding a tender offer, an open-end conversion or an early termination. In June 2025 BlackRock agreed to tender for 50 per cent of BIGZ shares at 99.5 per cent of NAV.

AUM by Segment

Saba runs the campaign as a multi-target structure. At each fund the process is identical: accumulate in the open market at a 10 to 15 per cent discount to NAV until reaching 5 to 15 per cent ownership, file a Schedule 13D, demand a tender offer, an enhanced buyback, an open-end conversion or a change of adviser, and propose a dissident slate when the board refuses. Standardisation is possible because the target is the legal wrapper, not the underlying portfolio. Settlements to date include enhanced quarterly buybacks at 12-plus BlackRock funds, the $1.6bn BIGZ and BMEZ tender at 99.5 per cent of NAV, and 25 per cent tender offers at the two Invesco muni CEFs at 99 per cent of NAV.

Saba's activist legal work is led by Olshan Frome Wolosky, the firm most closely associated with the shareholder-activist bar in the United States. Trading strategy, accumulation and the dissident campaign mechanics sit with Saba's in-house research and trading team. On the defence side, the targeted managers retained Investment Company Act of 1940 specialists: Sidley Austin for BlackRock, Davis Polk for Invesco and certain other managers, and Skadden Arps for Nuveen. Both sides have used the leading proxy solicitors, including Innisfree, D.F. King and Sodali.

Adviser assignments are based on public proxy filings (DFAN14A and DEFA14A), Schedule 13Ds on SEC EDGAR and media reporting, and may differ from the underlying engagement letters.

Figures in $m; reflects BIGZ fund-level operating income (dividend and interest income net of management fees). See BlackRock BIGZ N-CSR for audited figures.

The economic engine of the campaign is the combination of discount arbitrage and activist pressure. Saba enters at a 10 to 15 per cent discount to NAV; the activist campaign alone typically tightens the discount by 5 to 10 percentage points; and settlements at 99 or 99.5 per cent of NAV effectively eliminate the discount on the tendered portion. Per-fund gains are estimated at roughly $5 to $10 a share, with cumulative gains across the 50-plus campaign portfolio running into the hundreds of millions of dollars.

Figures are derived from SEC filings (Schedule 13D, N-CSR, DEF14A and DFAN14A), media reporting and CEF Connect, and are estimates of realised economics.

By the middle of 2026 the campaign has produced a clear verdict at the level of the asset class. BlackRock's June 2025 settlement at BIGZ and BMEZ, worth roughly $1.6bn, validated the model: Saba lost the proxy and still extracted a substantial capital return at close to NAV. BlackRock's enhanced buyback programmes at 12 or more funds, Invesco's 25 per cent tenders, the partial invalidation of Nuveen's control share bylaws, the SEC's open review of CEF governance and the Supreme Court argument in FS Credit Opportunities v. Saba together amount to a rewriting of the rules of the wrapper. Saba's December 2024 expansion into UK investment trusts has produced liquidity events at six of the seven original targets, including Herald Investment Trust. Copycats including Cornerstone, Bulldog Investors and Karpus have institutionalised the playbook, which now functions as a recognised sub-strategy within the activist hedge-fund universe.