BlackRock Capital Allocation Term Trust · NYSE:BCAT
BlackRock Capital Allocation Term Trust — Proxy Contest (May 2024)
61 slides from BlackRock Capital Allocation Term Trust's proxy contest presentation, May 20, 2024
Slide 1: Why Change Is Urgently Needed at 10 BlackRock CEFs
S——— WHY CHANGE IS URGENTLY NEEDED AT 10 BLACKROCK CEFS PREPARED BY SABA CAPITAL MANAGEMENT
Slide 2: Table of Contents
Table of Contents Overview: Saba’s Campaigns for Change at the 10 BlackRock Closed-End 3 Funds Case for Change: BlackRock and the Current Board Have Erased Billions in ll Value and Limited Shareholder Rights Our Solution: Saba’s Independent and Qualified Candidates Have a Shareholder-Friendly Plan t
Slide 3: Overview: Saba's Campaigns for Change at the BlackRock Closed-End Funds
HEY BLACKROCK Overview Saba's Campaigns for Change at the 10 BlackRock Closed-End Funds
Slide 4: Why We Are Here
Why We Are Here In 2023, Saba nominated trustees at three BlackRock funds. Our nominees were not elected at two funds because these elections were designed to fail due to BlackRock’s impossible to achieve voting standard and BlackRock’s refusal to provide Saba with shareholder lists to solicit votes
Slide 5: Saba Is Pursuing a Reasonable Level of Change at Each Fund
Saba Is Pursuing a Reasonable Level of Change at Each Fund We Are Seeking to Replace a Minority of the Board at 7 Funds BlackRock Health Sciences Term Trust (BMEZ) + — Given that these funds' Boards are classified, there is not a mechanism to seek majority change even if it was warranted. + However,
Slide 6: Saba Is an Experienced Investor in Closed-End Funds
Saba Is an Experienced Investor in Closed-End Funds * We are the world’s largest single investor in CEFs, managing a $5.8 billion portfolio that is invested across more than 200 CEFs. v Saba’s successful track record as a CEF activist has earned it recognition as the “Activist Hedge Fund Manager of
Slide 7: Saba Has a Track Record of Sound Governance and Value Creation
Saba Has a Track Record of Sound Governance and Value Creation Our own funds serve as examples of best-in-class corporate governance in the CEF industry. We also have a demonstrated record of advocating for shareholder rights at other funds. y Plurality vote standard, equal voting rights, multiple l
Slide 8: About the BlackRock Funds: BFZ, BCAT, ECAT, BMEZ and BIGZ
About the BlackRock Funds: BFZ, BCAT, ECAT, BMEZ and BIGZ BlackRock California Municipal Income Trust NYSE: BFZ) Inception Date: July 31, 2001 Asset Class: Fixed income Three-Year Performance vs. Benchmark: BlackRock Capital Allocation Term Trust (NYSE: BCAT) Inception Date: September 25, 2020 Asset
Slide 9: About the BlackRock Funds: MHN, MYN, MPA, BNY and BSTZ
About the BlackRock Funds: MHN, MYN, MPA, BNY and BSTZ BlackRock MuniHoldings New York Quality Fund (NYSE: MHN’ Inception Date: September 19, 1997 Asset Class: Fixed income Three-Year Performance vs. Benchmark: BlackRock MuniYield New York Quality Fund (NYSE: MYN Inception Date: March 16, 1992 Asset
Slide 10: Saba Is Committed to Turning Around the BlackRock Funds
Saba Is Committed to Turning Around the BlackRock Funds Saba has a long history of investing in CEFs and engaging with BlackRock about its CEFs. Saba wins a lawsuit stating that the Ayear into its dispute with a a ; ® Saba, BlackRock BlackRock Funds’ trustees robbed OBSERVER © Boaz Weinstein begins
Slide 11: Case for Change
HEY BLACKROCK Case for Change BlackRock and the Current Board Have Destroyed Billions in Value and Crushed Shareholder Rights
Slide 12: BlackRock Is Talking Out of Both Sides of Its Mouth
BlackRock Is Talking Out of Both Sides of Its Mouth BlackRock says one thing as an investor but does the opposite when managing its own funds. BlackRock © A & © BlackRock. “Directors should be re-elected annually; classification of the board generally limits shareholders’ rights to regularly evaluat
Slide 13: BlackRock and Its Trustees Have Limited Shareholder Rights
BlackRock and Its Trustees Have Limited Shareholder Rights EA ESES ES ESE ; A federal court ruled that several of the Fund's trustees illegally stripped shareholders’ votes at last year’s annual meeting." Each of the 10 Funds’ trustees serves on at least 68 other BlackRock fund boards, in addition t
Slide 14: The BlackRock Funds Continue to Disregard Good Governance
The BlackRock Funds Continue to Disregard Good Governance Nine of the 10 BlackRock Funds continue to have classified Boards, despite this being a "problematic governance structure.” * The annual election of all trustees — at one time — encourages board accountability to shareholders, which, in turn,
Slide 15: The BlackRock Funds Continue to Disregard Good Governance (cont.)
The BlackRock Funds Continue to Disregard Good Governance (cont.) Each of the Funds’ trustees serves on at least 68 other BlackRock boards, in addition to their other professional responsibilities — severely limiting the time they have available to focus on each fund. * We believe that it is impract
Slide 16: ISS criticized the Funds' governance policies
The BlackRock Funds Continue to Disregard Good Governance (cont.) Last year, Institutional Shareholder Services - a leading independent proxy advisory firm — criticized three of the Funds’ governance policies, yet little has changed. “In addition, the fund's corporate governance features several abu
Slide 17: BlackRock Cares More About Entrenching Itself From Accountability
BlackRock Cares More About Entrenching Itself From Accountability The current Boards would rather strip shareholders of their rights than accept criticism. @ busnessmire U.S. District Court for the Southern District of New York Rules That Certain Closed-End Funds, Including Funds Advised by BlackRoc
Slide 18: BlackRock Heavily Restricted Who Saba Could Nominate
BlackRock Heavily Restricted Who Saba Could Nominate BlackRock restricted Saba from nominating any individuals with current CEF experience. x ISSUE 1: The Funds’ bylaws essentially prohibit Saba from nominating anyone currently working in the investment management industry by eliminating people who
Slide 19: The Funds Trade at a Disappointing -11.8% Average Discount to NAV
The Funds Trade at a Disappointing -11.8% Average Discount to NAV We believe the Funds’ persistent trading discounts are a direct result of poor governance and mismanagement under the oversight of the current trustees. [ BSTZ } [ -17.7% } ( BIGZ ) { -17.6% J f BMEZ } [ -16.5% } f MHN } { -13.1% } f
Slide 20: The BlackRock Funds Have Significantly Underperformed
The BlackRock Funds Have Significantly Underperformed Each of the 10 CEFs have had negative returns over the past three years, demonstrating their Boards’ persistent inability to turn around their performance. Ticker Three-Year Total Return Performance vs. Benchmark ( BIGZ } { 57.1% }) [ 44.3% } ( B
Slide 21: The BlackRock Funds Have Significantly Underperformed (cont.)
The BlackRock Funds Have Significantly Underperformed (cont.) Eight of the 10 CEFs have underperformed their benchmarks over the past five years or since inception, demonstrating their Boards’ persistent inability to turn around their performance. Ticker Five-Year Total Return Performance vs. Benchm
Slide 22: BlackRock Could Easily Unlock Billions of Dollars
BlackRock Could Easily Unlock Billions of Dollars If BlackRock provided an opportunity to exit at NAV, shareholders could gain $1.4 billion across these 10 Funds. BCAT {$17.34 $15.78 | [ $167,640,408 J BFZ sue | [ $33,070,004 } $718 | ( $323,163,072 } BMEZ $14.76 | ( $291,849,182 } BNY }[( $31,352,2
Slide 23: The Funds Are Racking Up Expenses
The Funds Are Racking Up Expenses Last year, the BlackRock Funds spent approximately $142 million of shareholders’ money on expenses. BCAT’ $2,048,314,068 $24,376,782 119% [ BIGZ’ ]( $2.026,469,838 |{ $29,279,222 ‘| [ 1.44% } [ ECAT" ](_ $1977,848,928 | [ $24,285,241 \( 123% ] ( BMEZ" ] (. $1,907,37
Slide 24: Inability to Provide Reliable Dividends/Income to Investors
One of the Funds’ Biggest Failures Is Their Inability to Provide Reliable Dividends/Income to Investors BlackRock acknowledges that shareholders want income, but the reality is that the Funds are generating almost zero income — despite the fact that they were marketed as income-producing funds. [ Pe
Slide 25: Inability to Provide Reliable Dividends/Income to Investors (cont.)
One of the Funds’ Biggest Failures Is Their Inability to Provide Reliable Dividends/Income to Investors (cont.) If a fund loses half of an investor’s capital, it is simply not going to be able to produce the level of income that the investor was seeking when they invested in the fund. “BlackRock has
Slide 26: Correcting the Record on BlackRock's False Claims
Correcting the Record on BlackRock’s False Claims BlackRock’s Claims “Your fund is under attack [by Saba].” “.Saba's actions are harmful to long-term shareholders of the Trust.” “Saba's true goal is a quick payout, and more recently, revenue in the form of management fees.” “Saba failed to win a sin
Slide 27: Correcting the Record on BlackRock's False Claims (cont.)
Correcting the Record on BlackRock’s False Claims (cont.) Saba’s Motives Saba’s Nominees BlackRock’s Claims ‘In addition to effectively voting itself in as investment adviser, causing those funds to pay a management fee to Saba, Saba has made radical changes to the investment strategies of those fun
Slide 28: We Are Seeking to Replace the BlackRock Funds' Trustees
We Are Seeking to Replace the BlackRock Funds’ Trustees The incumbent trustees have failed in their fiduciary duties, overseeing poor performance and limiting shareholders’ rights. O O O O CN (ax (am CY CN Robert Fairbairn Cynthia L. Egan Stayce D. Harris R. Glenn Hubbard Catherine A. Lynch Trustee
Slide 29: The Public Agrees That BlackRock Must Do Better
The Public Agrees That BlackRock Must Do Better cM Clinton M 30 August, 2019 Obviously the investors. If you have the fund managers selecting the directors the board is naturally not going to be independent. It is like the fox watching the hen house. If the investment manager is under-performing (on
Slide 30: Proxy Advisory Firms Agree That BlackRock Must Do Better
Proxy Advisory Firms Agree That BlackRock Must Do Better ISS> “[ECAT] also features a worst-of-all-worlds voting standard for director elections, thereby erecting a formidable entrenchment mechanism.” “Since [BIGZ's IPO in March 2021, its] share price has declined more than 60 percent, erasing billi
Slide 31: BlackRock's New Discount Management Program Is Too Little, Too Late
BlackRock’s New Discount Management Program Is Too Little, Too Late This recent announcement only came after Saba’s engagement. * BlackRock’s recently announced discount management program is a clear defensive maneuver, in our view. * BlackRock could have done this at any time. * To the extent credi
Slide 32: Our Solution
HEY BLACKROCK Our Solution Saba’s Independent and Qualified Trustee Candidates Have a Shareholder- Friendly Plan to Deliver Superior Returns and Enhanced Governance
Slide 33: Our Independent and Qualified Trustee: Athanassios Diplas
Our Independent and Qualified Trustee: Athanassios Diplas Athanassios Diplas has significant experience in credit markets, including swaps, derivatives, risk management and trading. + Former Managing Director at Deutsche Bank, where he also served as Global Head of Systemic Risk Management, Global H
Slide 34: Our Independent and Qualified Trustee: Ilya Gurevich
Our Independent and Qualified Trustee: Ilya Gurevich Ilya Gurevich is a retirement planner with more than 25 years of experience in the financial services industry and a deep understanding of the BlackRock Funds retail shareholders. + Institutional Shareholder Services Inc. recommended ECAT and BIGZ
Slide 35: Our Independent and Qualified Trustee: Shavar Jeffries
Our Independent and Qualified Trustee: Shavar Jeffries Shavar Jeffries has corporate governance expertise and experience as an executive and director of various businesses across education, policy and law. Previously served on the board of directors of Pzena Investment Management, KIPP Foundation, N
Slide 36: Our Independent and Qualified Trustee: David Littlewood
Our Independent and Qualified Trustee: David Littlewood David Littlewood has more than two decades of experience in capital markets, asset management and securities trading, as well as valuable expertise in debt securities (credit product structuring and distribution). * Co-Founder and former CEO of
Slide 37: Our Independent and Qualified Trustee: David Locala
Our Independent and Qualified Trustee: David Locala ‘) David Locala is a former M&A banker with more than 30 years of experience working in the financial services industry and advising companies in the technology sector. + Former Managing Director and Global Head of Technology M&A at Citigroup Globa
Slide 38: Our Independent and Qualified Trustee: Jennifer Raab
Our Independent and Qualified Trustee: Jennifer Raab Jennifer Raab is an executive with experience leading various private institutions and nonprofit organizations and corporate governance know-how from her time serving as a director of several nonprofit companies. + President and CEO of the New Yor
Slide 39: Our Independent and Qualified Trustee: Alexander Vindman
Our Independent and Qualified Trustee: Alexander Vindman Alexander Vindman is a former member of the White House’s National Security Council with significant experience advising on European affairs and renown for upholding sound governance principles through ethical leadership and accountability. *
Slide 40: Our Nominees' Plan to Create Long-Term Value for All Investors
Our Nominees’ Plan to Create Long-Term Value for All Investors Our nominees’ #1 priority as trustees would be to put the Fund’s long-suffering shareholders first. Vv Offer a liquidity event for Explore various tools to narrow the shareholders so they can exit at NAV, discount: if they so wish. _A v
Slide 41: Our Nominees Have Solutions to Improve the Funds' Governance Issues
Our Nominees Have Solutions to Improve the Funds’ Governance Issues We believe that strengthening shareholders’ rights at the Funds would increase the value of their investment. Over-Boarding Over-Boarding BlackRock says non-executive directors should not serve on more than 5 v__ The Funds’ Boards s
Slide 42: We Would Support a Tender Offer for BIGZ, BMEZ, ECAT, BCAT and BSTZ
We Would Support a Tender Offer for BIGZ, BMEZ, ECAT, BCAT and BSTZ We believe a tender offer for these four funds makes sense — and is something BlackRock is already considering. * BlackRock itself is contemplating doing a tender for 100% of the shares and considers these funds viable if only $200
Slide 43: We Have a Credible Plan for Finding a New Manager
We Have a Credible Plan for Finding a New Manager If the termination proposal passes, the Board would run a process to evaluate potential replacement candidates and then ask shareholders to vote on the potential replacement manager. * Asa fiduciary, the current board should have a plan in the event
Slide 44: Appendix
HEY BLACKROCK Appendix
Slide 45: A Closer Look: The Funds' Quorum Requirements
A Closer Look: The Funds’ Quorum Requirements All of the BlackRock Funds - with the exception of MYN and MHN - have higher quorum requirements than many of their CEF peers. Blackrock knowingly misleads shareholders to believe that Saba obstructed ECAT’s and BIGZ’s 2023 shareholder meetings, causing
Slide 46: A Closer Look: BlackRock's Refusal to Hand Over NOBO Lists
A Closer Look: BlackRock’s Refusal to Hand Over NOBO Lists Saba’s efforts to solicit votes from shareholders - and help achieve a quorum - have been constrained by BlackRock’s refusal to provide the non-objecting beneficial owners (“NOBO”) lists. * BlackRock is refusing to provide the names of share
Slide 47: Other Managers Have Acted in Shareholders' Best Interests
Other Managers Have Acted in Shareholders’ Best Interests We see a clear contrast between BlackRock’s actions and those of other managers and funds. LIFirst Trust PIMCO Global Portfolios Y Over the last 12 months, the four funds v In September 2023, PIMCO announced a that comprise the FT Energy Inco
Slide 48: Other Managers Have Acted in Shareholders' Best Interests (cont.)
Other Managers Have Acted in Shareholders’ Best Interests (cont.) We see a clear contrast between BlackRock’s actions and those of other managers and funds. Baillie Gifford’ * In March 2024, the Scottish Mortgage Investment Trust unveiled the largest-ever share repurchase program (at least £1 billio
Slide 49: We Have Experience Eliminating CEFs' Trading Discounts
We Have Experience Eliminating CEFs’ Trading Discounts * Saba tries to find creative solutions for any fund that we're involved in. * We do not have a “cookie cutter” approach. * CEN had a -19.4% discount to NAV prior to Saba’s engagement. The discount reached as wide as -27.3% during the year of ou
Slide 50: We Have Consistently Defended CEF Shareholders' Rights
We Have Consistently Defended CEF Shareholders’ Rights * June 2020: The Arizona Superior Court issues a preliminary injunction that prevented Voya Prime Rate Trust (NYSE: PPR) from enforcing a bylaw amendment that substantially raised the voting threshold required to elect board trustees. Link. * Ja
Slide 51: Information on BlackRock Fund Benchmarks - From 2023 Annual Reports
Information on BlackRock Fund Benchmarks - From 2023 Annual Reports ¢ BFZ: Bloomberg Municipal Bond Index + BCAT: MSCI ACWI Index ¢ ECAT: MSCI ACWI Index + BMEZ: MSCI ACWI Index ¢ BIGZ: Russell 2500 Growth Index ¢ MHN: Bloomberg Municipal Bond Index ¢ MYN: Bloomberg Municipal Bond Index + MPA: Bloom
Slide 52: Disclaimer
Disclaimer The materials in this presentation (the “Presentation”) are for informational purposes only, are not complete and do not constitute an agreement, offer, a solicitation of an offer, or any advice or recommendation to enter into or conclude any transaction or confirmation thereof (whether o
Slide 53: Affidavit
Affidavit of John Glenn Grau State of CONNECTICUT ) ) ss.: County of FAIRFIELD ) John Glenn Grau , being duly sworn, deposes and states: 1. I am the founder and Chief Executive Officer of InvestorCom LLC (“ InvestorCom ”), a proxy solicitation and shareholder engagement firm. This affidavit is based
Slide 54: Saba Capital Management, L.P. posted the below to heyblackrock.com
Saba Capital Management, L.P. posted the below to https://www.heyblackrock.com/ (the “Website”).
Slide 55: Saba's Nominees
HEY, a BLACKROCK SABA'S NOMINEES Our nominees are committed to improving shareholder returns and putting your interests first. Athanasios Diplas, Me ipl possesses significant expertise in cred markets ~ including swaps, derivatives, riskmanagement and racing ~ having served as Managing Director, Glo
Slide 56: David Locala, Jennifer Raab, Alexander Vindman
David Locala Mr Lecalais a former M&A banker with more than 30 years of experience working inthe advised companies on MBA mates across the technology sector. Jennifer Raab Ms. Raab we of various private and nonprofit ganizations, inclang CEO of the New York Stem Cell Foundation Research Intute forme
Slide 57: Resources
RESOURCES Broadcast Interviews NBC's Ful Exclusive Interview with Saba Capitals Boaz Weinstein on BlackRock Press Release: ‘Saba Launches Campaign to Improve the Boards of 10 Poorly Governed and Underperforming Closed-End Funds Managed by BlackRock U.S, District Court for the Southern District of Ne
Slide 58: The Website contains a link to the following article
The Website contains a link to the following article. Activist Boaz Weinstein says BlackRock funds are ‘crushing shareholder rights’ CNBC By Rohan Goswami May 17, 2024 · Boaz Weinstein’s Saba Capital detailed its plan for change at 10 BlackRock closed-end funds that trade at a steep discount to net
Slide 59: The problem and the solution
The problem and the solution Closed-end funds have a finite number of shares. Investors who want to sell their positions have to find an interested buyer, which means they may not be able to sell at a price that reflects the value of a fund’s holdings. In open-ended funds, by contrast, an investor c
Slide 60: boaz weinstein
boaz weinstein @ @boazweinstein Thanks! I'm going to keep going and going for all of us. = ©» Wi) @BlackRock
Slide 61: Dividend Master
Dividend Master @DividendMaster $EIP| NAV looks to be back to early 2018 highs turning all those First Trust CEF into an ETF a screaming home run for investors thank you again @boazweinstein !
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