One Hedge Fund Manager's Plan For $200 Million Investor Windfall
Portfolio Pulse from Neil Dennis
Boaz Weinstein, founder of Saba Capital Management, has publicly urged BlackRock's CIO Rick Rieder to merge BlackRock ESG Allocation Trust (ECAT) with one of BlackRock's ESG mutual funds. Weinstein suggests this would eliminate the discount on ECAT shares and create a $200 million windfall for investors. Saba Capital recently increased its stake in ECAT to 19,025,530 shares, making it 7.5% of Saba's holdings and 18.6% of ECAT. Weinstein's strategy reflects a trend among hedge funds to invest in undervalued closed-end funds and push for actions that realize their underlying value.
November 16, 2023 | 5:56 pm
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Saba Capital's Boaz Weinstein has proposed a merger of BlackRock ESG Allocation Trust (ECAT) with a BlackRock ESG mutual fund, which could potentially lead to a $200 million gain for investors and eliminate the discount on ECAT shares.
The proposal by Saba Capital to merge ECAT with a BlackRock ESG mutual fund could lead to a significant revaluation of ECAT shares if the merger is pursued. Given that Saba Capital has increased its stake in ECAT, this indicates a strategic interest in realizing the fund's underlying value, which could positively impact the share price in the short term. However, the actual impact will depend on BlackRock's response to the proposal and the likelihood of the merger taking place.
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