BlackRock Science and Technology Term Trust · NYSE:BSTZ
BlackRock Science and Technology Term Trust — Proxy Contest (May 2024)
70 slides from BlackRock Science and Technology Term Trust's proxy contest presentation, May 22, 2024
Slide 1: BlackRock Closed-End Funds: Focused on the interests of all shareholders
BlackRock Closed-End Funds Focused on the interests of all shareholders Contested funds: BlackRock California Municipal Income Trust (NYSE: BFZ) BlackRock New York Municipal Income Trust (NYSE: BNY) BlackRock MuniHoldings New York Quality Fund, Inc. (NYSE: MHN) BlackRock MuniYield Pennsylvania Quali
Slide 2: Executive Summary
Executive Summary • Since 1988, BlackRock has been a leader in closed-end funds (CEFs) through BlackRock1 – a trusted continuous innovation and a focus on clients’ evolving needs fiduciary for investors • BlackRock’s CEFs are structured to meet the financial goals of all shareholders, offering a uni
Slide 3: BlackRock – a trusted fiduciary for investors
BlackRock – a trusted fiduciary for investors
Slide 4: Overview of BlackRock CEFs: Designed for CEF shareholders
Overview of BlackRock CEFs: Designed for CEF shareholders BlackRock CEFs are structured to meet the financial goals of CEF shareholders, consistent with the investment objective of each fund. Since 1988, BlackRock has established a leadership position in CEFs through continuous innovation and a focu
Slide 5: Characteristics of contested CEFs' shareholders
Characteristics of contested CEFs’ shareholders Beneficial holder accounts • 294,861 across 10 CEFs1 Average position size ~$32K per beneficial holder account across 10 CEFs1 • Median income $104K of all CEF shareholders2 Average age of shareholders 60+ years 3 across 8 CEFs Shareholders 60+ years o
Slide 6: The Funds' Boards protect the main features of CEFs and shareholders
The Funds’ Boards protect the main features of CEFs and the interests of all shareholders CEFs offer a unique combination of steady income, access to private investments, daily liquidity and capital return BlackRock provides substantial benefits in terms of investment expertise, risk management and
Slide 7: The current Board is a better choice than Saba's nominees
The current Board is a better choice than Saba’s less qualified, conflicted nominees Highly qualified current trustees surpass Saba’s nominees in aggregate and on every relevant skill ? Genuinely independent Chair and Trustees ? New trustees identified by independent Governance Committee, advised by
Slide 8: The Funds' Boards and management teams create value for all shareholders
The Funds’ Boards and management teams create value for all shareholders
Slide 9: BlackRock CEFs targeted by Saba
BlackRock CEFs targeted by Saba Asset Class Contested Funds Key Features Multi-Asset Equity Municipal Bonds BCAT ECAT BIGZ BMEZ BSTZ BFZ BNY MHN MPA MYN BlackRock Capital Allocation Term Trust BlackRock ESG Capital Allocation Term Trust BlackRock Innovation and Growth Term Trust BlackRock Health Sci
Slide 10: Boards and BlackRock have taken decisive actions since 2022 lows
From challenging lows in 2022, the Funds’ Boards and BlackRock have taken decisive actions to drive significant performance improvements and substantial discount reductions Total Fund v. Discount to NAV Market Price Return Index Return 10 12/31/2022 5/20/2024 % Change 12/31/2022 – 5/20/2024 12/31/20
Slide 11: Decisive steps to address the trading discounts
The Funds’ Boards and management have taken decisive steps to address the trading discounts How does action help Action taken reduce CEF discount? Increase CEF visibility/liquidity ? ✓ Provides additional demand for ? ✓✓ CEFs Increase payouts to ? ✓ shareholders Enhances CEF yield stability ? ✓ Repu
Slide 12: BlackRock Capital Allocation Term Trust (BCAT)
BlackRock Capital Allocation Term Trust (BCAT) Total Shareholder Return (TSR) • BCAT has recently outperformed peers – In the first years since inception in Sep 2020, the Trust faced headwinds due to its lower allocation to equities relative to Tactical Opportunities peers and the time it took to ra
Slide 13: BCAT: actions taken to mitigate discount
BCAT: actions taken to mitigate discount How does action help Action taken BCAT reduce CEF discount? Inclusion in CEF index Increase CEF visibility/liquidity Fund of funds agreement Provides additional demand for CEFs Distribution rate increases Increase payouts to shareholders Managed / level-rate
Slide 14: BlackRock ESG Capital Allocation Term Trust (ECAT)
BlackRock ESG Capital Allocation Term Trust (ECAT) Total Shareholder Return (TSR) • #1 performing trust in peer group in 2023 • ECAT has outperformed peers’ median by 2,577bps in the 1-year timeframe • The Trust’s Board believes ECAT’s performance is best measured against a blended benchmark—50% MSC
Slide 15: ECAT: actions taken to mitigate discount
ECAT: actions taken to mitigate discount How does action help Action taken ECAT reduce CEF discount? Inclusion in CEF index Increase CEF visibility/liquidity Fund of funds agreement Provides additional demand for CEFs Distribution rate increases Increase payouts to shareholders Managed / level-rate
Slide 16: BlackRock Innovation and Growth Term Trust (BIGZ)
BlackRock Innovation and Growth Term Trust (BIGZ) Total Shareholder Return (TSR) • BIGZ was launched in March of 2021, which was near the market peak for SMID-cap growth stocks from a public perspective. The private portfolio has also weighed on performance given markdowns on private equity investme
Slide 17: BIGZ: actions taken to mitigate discount
BIGZ: actions taken to mitigate discount How does action help Action taken reduce CEF discount? Increase CEF ? visibility/liquidity Provides additional ? demand for CEFs Increase payouts to ? shareholders Enhances CEF yield ? stability Repurchase CEF shares at ? discount Repurchase up to 2.5% of CEF
Slide 18: BlackRock Health Sciences Term Trust (BMEZ)
BlackRock Health Sciences Term Trust (BMEZ) Total Shareholder Return (TSR) • The Trust’s Board believes BMEZ should be compared to a subset of the Health CEFs: HQL1 and HQH2 – when assessing performance – BMEZ, HQL and HQH are significantly more invested in biotech companies (typically more growth-f
Slide 19: BMEZ: actions taken to mitigate discount
BMEZ: actions taken to mitigate discount How does action help How does action help Action taken BMEZ Action taken BMEZ reduce CEF discount? reduce CEF discount? Inclusion in CEF index Increase CEF Limited term providing visibility/liquidity Liquidity at NAV 100% liquidity at NAV Fund of funds agreem
Slide 20: BlackRock Science and Technology Term Trust (BSTZ)
BlackRock Science and Technology Term Trust (BSTZ) Total Shareholder Return (TSR) • BSTZ is an innovative investment product that provides unique access to private equity and growth investment opportunities while meeting its income objectives PERFORMANCE SNAPSHOT • BSTZ is differentiated from other
Slide 21: BSTZ: actions taken to mitigate discount
BSTZ: actions taken to mitigate discount How does action help How does action help Action taken BSTZ Action taken BSTZ reduce CEF discount? reduce CEF discount? Inclusion in CEF index Increase CEF Limited term providing visibility/liquidity Liquidity at NAV 100% liquidity at NAV Fund of funds agreem
Slide 22: BlackRock California Municipal Income Trust (BFZ)
BlackRock California Municipal Income Trust (BFZ) Total Shareholder Return (TSR) • BFZ has outperformed peers over most timeframes PERFORMANCE SNAPSHOT Total Shareholder Return1 – Its 1-year TSR of 15.84% is 1,139bps higher than peers’ median over the same period BFZ Peer median 15.84% – Outperforma
Slide 23: BFZ: actions taken to mitigate discount
BFZ: actions taken to mitigate discount How does action help How does action help Action taken BFZ Action taken BFZ reduce CEF discount? reduce CEF discount? Increase CEF Events for financial advisors and Inclusion in CEF index Increase CEF visibility and visibility/liquidity end clients support sha
Slide 24: BlackRock New York Municipal Income Trust (BNY)
BlackRock New York Municipal Income Trust (BNY) Total Shareholder Return (TSR) • BNY has outperformed peers over most timeframes PERFORMANCE SNAPSHOT Total Shareholder Return1 – YTD TSR is 110bps ahead of peers’ median BNY Peer median – Outperformance over a 1-year timeframe is 170bps 8.70% 7.00% 3.
Slide 25: BNY: actions taken to mitigate discount
BNY: actions taken to mitigate discount How does action help How does action help Action taken BNY Action taken BNY reduce CEF discount? reduce CEF discount? Increase CEF Events for financial advisors and Inclusion in CEF index Increase CEF visibility and visibility/liquidity end clients support sha
Slide 26: BlackRock MuniHoldings New York Quality Fund (MHN)
BlackRock Muniholdings New York Quality Fund, Inc. (MHN) Total Shareholder Return (TSR) • MHN outperformed peers YTD as well as over 5- and 10-year periods PERFORMANCE SNAPSHOT Premium / (Discount) to NAV Total Shareholder Return1 7.28% MHN Peer median discount is in line 6.64% 3.19% • MHN to NAV wi
Slide 27: MHN: actions taken to mitigate discount
MHN: actions taken to mitigate discount How does action help How does action help Action taken MHN Action taken MHN reduce CEF discount? reduce CEF discount? Increase CEF Events for financial advisors and Inclusion in CEF index Increase CEF visibility and visibility/liquidity end clients support sha
Slide 28: BlackRock MuniYield Pennsylvania Quality Fund (MPA)
BlackRock MuniYield Pennsylvania Quality Fund (MPA) Total Shareholder Return (TSR) • MPA has outperformed peers over most timeframes PERFORMANCE SNAPSHOT of the Total Shareholder Return1 – YTD TSR is 67bps ahead peers’ median MPA Peer median 9.65% – 1-year TSR is 9.65%, 290bps higher than peers’ med
Slide 29: MPA: actions taken to mitigate discount
MPA: actions taken to mitigate discount How does action help How does action help Action taken MPA Action taken MPA reduce CEF discount? reduce CEF discount? Increase CEF Events for financial advisors and Inclusion in CEF index Increase CEF visibility and visibility/liquidity end clients support sha
Slide 30: BlackRock MuniYield New York Quality Fund (MYN)
BlackRock MuniYield New York Quality Fund, Inc. (MYN) Total Shareholder Return (TSR) • MYN has outperformed peers over most timeframes PERFORMANCE SNAPSHOT Total Shareholder Return1 – 1-year TSR of 9.78% is 277bps higher than peers’ median over the MYN Peer median same period 9.78% 3.05% 7.00% 2.17%
Slide 31: MYN: actions taken to mitigate discount
MYN: actions taken to mitigate discount How does action help How does action help Action taken MYN Action taken MYN reduce CEF discount? reduce CEF discount? Increase CEF Events for financial advisors and Inclusion in CEF index Increase CEF visibility and visibility/liquidity end clients support sha
Slide 32: Rigorous Board oversight ensures all shareholders are protected
Rigorous Board oversight ensures all shareholders are protected
Slide 33: Why are our nominees the best candidates for the Boards?
Why are our nominees collectively the best candidates for the contested Funds’ Boards? ?Genuinely independent Chair and Trustees ?New trustees identified by independent Governance 80% Committee, advised by external search firm Independent ?Multiple years of investment company and CEF governance expe
Slide 34: The current Board has the skills needed to oversee closed-end funds
The current Board has the extensive set of skills needed to effectively oversee closed-end funds R. Glenn W. Carl Cynthia L. Robert Lorenzo A. Stayce D. J. Phillip Catherine A. John M. Arthur P. Hubbard Kester Egan Fairbairn Flores Harris Holloman Lynch Perlowski Steinmetz Chair Vice Chair MPA, MHN,
Slide 35: Rigorous governance and oversight of BlackRock CEFs
Rigorous governance and oversight of BlackRock CEFs The Funds’ Boards regularly meet with the CEFs’ portfolio management teams to assess performance and fund positioning Trustees serve on various committees that thoroughly examine all aspects of the CEFs’ management Committee Structure Assists Funds
Slide 36: Proactive actions taken by Standing Discount Committee
Proactive actions taken by Standing Discount Committee Discount Committee was established in 2018 to study all aspects of secondary market discounts and to assist the Funds’ Boards in monitoring CEF trading by: 1) Defining the drivers of discounts 2) Identifying potential solutions 3) Implementing r
Slide 37: We are open to engaging with all our shareholders
We are open to engaging with all our shareholders • The Funds’ Boards seek to actively engage with all shareholders • We approach these engagements with the goal of finding reasonable solutions to address shareholder concerns, including when those concerns are raised by institutional investors and h
Slide 38: Inherent conflict between Saba's interests and those of other shareholders
Inherent conflict between Saba’s self-serving interests and those of other shareholders
Slide 39: Saba's aggressive and self-serving behavior could harm other shareholders
Saba’s aggressive and self-serving behavior could harm other shareholders The Saba Playbook Funds where vs. BlackRock Offers: Saba did this BRW SABA “Bait and • Take over fund management, fundamentally change switch” fund YES YES vs. Consistent fund strategy strategies to suit Saba’s own purposes ob
Slide 40: Saba does not deliver positive change as a manager
Saba does not deliver (positive) change as a manager Shareholder Saba sets high Fund manager1 Saba fails to meet these standards standards for targeted funds and, in many cases, underperforms the prior manager “[A]ll gains through Saba’s activism are gains • Since Saba became manager of BRW (formerl
Slide 41: Saba's Broken Promises – BRW
Saba’s Broken Promises – BRW Saba Capital Income & Opportunities Fund (formerly Voya Prime Rate Trust) Saba’s Claims about BRW 1 Reality Total Shareholder Return BRW Morningstar US CEF Bank Loans BlackRock Bank Loans Funds Median2 13.7% Since takeover extract (6/4/2021 – 19.5% 5/20/2024) 31.0% Avera
Slide 42: Saba's Broken Promises – SABA
Saba’s Broken Promises – SABA Saba Capital Income & Opportunities Fund II (formerly Templeton Global Income Fund) Saba’s Claims about SABA1 Reality Total Shareholder Return SABA 6.9% 5.6% Morningstar US CEF Global extract Income YTD (12/31/2023 – 5/20/2024) Average NAV Current NAV Premium / (Discoun
Slide 43: Are Saba's interests really aligned with those of all shareholders?
Are Saba’s interests really aligned with those of all shareholders? Saba’s actions at “BRW” Saba’s actions at “SABA” ~38% ~25% -68% -88% decline decline ~12% ~3% Saba ownership prior to takeover Saba ownership today2 Saba ownership prior to takeover Saba ownership today2 in June Before 20211 After i
Slide 44: Multi-year activism campaign at BlackRock Funds has squandered shareholder value
Multi-year activism campaign at BlackRock Funds has squandered shareholder value in pursuit of Saba’s self-serving goals 2023 March – August 2024 2019 Saba nominates slate of inexperienced candidates to advance Saba fails to complete director its self-serving goals at ECAT, BIGZ January – April ques
Slide 45: Saba's nominees are unqualified and conflicted
Saba’s nominees are unqualified and conflicted
Slide 46: Saba's recent campaigns have raised some questions at ISS
Saba’s recent campaigns have raised some questions at ISS ISS on Saba’s unqualified nominees . . . Saba is unable to find enough competent nominees to warrant ISS’s endorsement of its Items on its proxies. Saba argued difficulties in attracting appropriate directors, but ISS believes Saba presented
Slide 47: Saba's nominees are unqualified versus current trustees
Saba’s nominees are unqualified versus current trustees They have few skills that are relevant to fund oversight Their pre-existing relationships with Saba raise serious questions about independence Athanassios David Alexander Ilya Gurevich Shavar Jeffries David Locala Jennifer Raab Diplas Littlewoo
Slide 48: Saba nominees raise many unanswered questions
Saba nominees raise many unanswered questions… • In response to Saba’s nominations, we asked to interview Saba’s director candidates, as we always do with potential directors • Saba refused to allow us to interview their nominees • As a result, we performed a review of the backgrounds of Saba’s nomi
Slide 49: How can Saba's nominees be truly independent?
How can Saba’s nominees be truly independent? Saba nominees’ pre-existing relationships with Saba raise serious questions about independence Athanassios Diplas Ilya Gurevich $ $ BOAZ WEINSTEIN $ LA $ David Locala Jennifer Raab Shavar Jeffries Connections to Boaz Weinstein / Saba Source: Public sourc
Slide 50: Saba Nominee: Athanassios Diplas
Saba Nominee: Athanassios Diplas Nominee for: BIGZ, BSTZ, ECAT, MPA ?Worked as Global Head of System Risk Management at Current Role: Deutsche Bank from 2010–2012. The firm was fined N/A over a money laundering scheme, which allegedly occurred during part of the time that he was the Global Primary E
Slide 51: Saba Nominee: Ilya Gurevich
Saba Nominee: Ilya Gurevich Nominee for: BFZ, BIGZ, BMEZ, BNY, MPA, ECAT ?No closed-end fund experience Current Role: Life, accident and health ?No retail investor perspectives insurance agent ?No relevant board experience Primary Experience: Trading & retirement planning Known prior Relationship wi
Slide 52: Saba Nominee: Shavar Jeffries
Saba Nominee: Shavar Jeffries Nominee for: BCAT, BFZ, BIGZ, BMEZ, MHN, MPA, ECAT Background Qualifications and Considerations Ran for mayor of Newark, NJ in 2014, a campaign that Current Role: included allegations of campaign misconduct, corruption CEO of KIPP Foundation and voter intimidation1 (cha
Slide 53: Saba Nominee: David Littlewood
Saba Nominee: David Littlewood Nominee for: BIGZ, ECAT, MPA ?In August 2007, Barclays announced that it would rescue Current Role: Cairn Capital’s $1.6 billion structured investment vehicle, N/A Cairn High Grade Funding I. The fund invested in long-term assets by borrowing through commercial paper a
Slide 54: Saba Nominee: David Locala
Saba Nominee: David Locala Nominee for: BIGZ, BMEZ, BSTZ, ECAT, MPA Background Qualifications and Considerations During his tenure at Deutsche Bank in 2014, Current Role: shareholders of PLX Technology sued over alleged N/A conflicts of interest of Deutsche Bank—including Locala specifically—regardi
Slide 55: Saba Nominee: Jennifer Raab
Saba Nominee: Jennifer Raab Nominee for: BCAT, BIGZ, BNY, MHN, MYN, MPA, ECAT Background Qualifications and Considerations While Raab served as chair of the NYC Landmarks Current Role: Preservation Commission between 1994 and 2001, CEO of New York Stem Cell media reported she allegedly used a staff
Slide 56: Saba Nominee: Alexander Vindman
Saba Nominee: Alexander Vindman Nominee for: BCAT, BIGZ, BSTZ, MYN , MPA, ECAT ?No closed-end fund experience Current Role: President of Here Right Matters ?No governance, business or finance experience1 Foundation (Ukraine aid) ?No retail shareholder perspectives Primary Experience:?No relevant boa
Slide 57: Only the current Funds' Boards have shareholders' best interests in mind
The answer is clear – only the current Funds’ Boards have the best interests of all shareholders in mind and BlackRock is the right manager for these Funds
Slide 58: The Funds' Boards are the best choice for all shareholders
The Funds’ Boards are the best choice for all shareholders and BlackRock is the right manager for the CEF Funds • The Funds’ Boards represent the best interests of all our shareholders — 290K+ beneficial holders. CEF holders invest in these products for predictable income over time and across invest
Slide 59: Appendix
Appendix
Slide 60: Decisive steps to address trading discounts – additional detail
The Funds’ Boards have taken decisive steps to address trading discounts – additional detail Action Taken High-level Description Took steps to qualify for inclusion in the S-Network Composite Closed-End Fund Index which is tracked by the Invesco CEF Inclusion in CEF index Income Composite ETF (PCEF)
Slide 61: BlackRock CEF Board Members: R. Glenn Hubbard
BlackRock CEF Board Members: R. Glenn Hubbard Up for re-election at: MPA, BCAT, ECAT, BMEZ, BIGZ, BSTZ R. Glenn Hubbard has served in numerous roles in the field of economics, including as the Chairman of the U.S. Council of Economic Advisers of the President of the United States. Dr. Hubbard’s expe
Slide 62: BlackRock CEF Board Members: W. Carl Kester
BlackRock CEF Board Members: W. Carl Kester Up for re-election at: MPA, BCAT, ECAT, BMEZ, BIGZ, BSTZ The Board benefits from W. Carl Kester’s experiences as a professor and author in finance, and his experience as the George Fisher Baker Jr. Professor of Business Administration at Harvard Business S
Slide 63: BlackRock CEF Board Members: Cynthia L. Egan
BlackRock CEF Board Members: Cynthia L. Egan Up for re-election at: MPA, ECAT, BIGZ Cynthia L. Egan brings to each Fund’s Board a broad and diverse knowledge of investment companies and the retirement industry as a result of her many years of experience as President, Retirement Plan Services, for T.
Slide 64: BlackRock CEF Board Members: Robert Fairbairn
BlackRock CEF Board Members: Robert Fairbairn Up for re-election at: MPA Robert Fairbairn is responsible for key strategic relationships and initiatives with some of BlackRock’s largest global clients. Since joining the firm in 1993, he has led many of BlackRock’s most important business divisions a
Slide 65: BlackRock CEF Board Members: Lorenzo A. Flores
BlackRock CEF Board Members: Lorenzo A. Flores Up for re-election at: MPA, ECAT, BIGZ Each Fund’s Board benefits from Lorenzo A. Flores’s many years of business, leadership and financial experience in his roles at various public and private companies. In particular, Mr. Flores’s service as Chief Fin
Slide 66: BlackRock CEF Board Members: Stayce D. Harris
BlackRock CEF Board Members: Stayce D. Harris Up for re-election at: MPA, ECAT, BIGZ Each Fund’s Board benefits from Stayce D. Harris’s leadership and governance experience gained during her extensive military career, including as a three-star Lieutenant General of the United States Air Force. In he
Slide 67: BlackRock CEF Board Members: J. Phillip Holloman
BlackRock CEF Board Members: J. Phillip Holloman Up for re-election at: MPA, MHN, MYN, BNY, BFZ Phillip Holloman retired from Cintas as President and Chief Operating Officer in 2018. Mr. Holloman is a founding member of Cintas’ diversity committee and received the Excalibur Award, the company’s high
Slide 68: BlackRock CEF Board Members: Catherine A. Lynch
BlackRock CEF Board Members: Catherine A. Lynch Up for re-election at: MPA, MHN, MYN, BNY, BFZ, ECAT, BIGZ Catherine A. Lynch, who served as the Chief Executive Officer and Chief Investment Officer of the National Railroad Retirement Investment Fund, benefits each Fund’s Board by providing business
Slide 69: BlackRock CEF Board Members: John M. Perlowski
BlackRock CEF Board Members: John M. Perlowski Up for re-election at: MPA, BCAT, ECAT, BMEZ, BIGZ, BSTZ John M. Perlowski’s experience as Managing Director of BlackRock, Inc. since 2009, as the Head of BlackRock Global Accounting and Product Services since 2009, and as President and Chief Executive
Slide 70: BlackRock CEF Board Members: Arthur P. Steinmetz
BlackRock CEF Board Members: Arthur P. Steinmetz Up for re-election at: MPA, MHN, MYN, BNY, BFZ The Board benefits from Arthur P. Steinmetz’s many years of business and leadership experience as an executive, chairman and director of various companies in the financial industry. Mr. Steinmetz’s servic
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