BIGZ Overview

Investment Opportunity in Closed-End Funds: Closed-end funds (CEFs) are currently undervalued and can be purchased at a discount, providing opportunities for income investors to capitalize on mispricing and yield while waiting for market sentiment to improve or activist investors to unlock value.

Role of Activist Investors: Activist investors like Phil Goldstein and Boaz Weinstein are actively buying discounted CEFs and pushing for changes to enhance shareholder value, demonstrating that strategic involvement can lead to significant returns.

Distribution Details: BlackRock's various funds announced their distributions per share for January 31, 2025, with amounts ranging from $0.042600 to $0.307370, and many funds are expected to include returns of capital in their distributions due to insufficient income.

Investment Performance Insights: The report highlights that shareholders should not draw conclusions about a fund's investment performance based solely on distribution amounts, as these may include returns of capital and do not necessarily reflect the fund's overall yield or income.

BlackRock's Changes to BIGZ: BlackRock is restructuring its tech-focused closed-end fund, the BlackRock Innovation and Growth Term Trust (BIGZ), in response to activist pressure, including a new management team and a significant share buyback program aimed at improving its performance and market price.

Market Impact of AI Developments: The emergence of China's AI chatbot DeepSeek has created uncertainty in the AI sector, but it is expected to drive American tech companies to enhance their AI offerings, potentially benefiting funds that invest in AI-related stocks, which currently offer attractive dividends.

BlackRock and Saba Capital Management Agreement: BlackRock will buy back a significant portion of shares in its closed-end funds, while Saba Capital has agreed to halt demands for management changes, marking a resolution in their ongoing conflict over fund management.

Impact on Shareholders: The settlement is seen as beneficial for shareholders, with Saba's founder highlighting the potential for improved governance and liquidity events that could enhance value for investors in these funds.

Investment Policy Changes: BlackRock Innovation and Growth Term Trust has approved changes to its investment policies, including a new policy to invest at least 80% of assets in technology and privately held companies, and plans to change its name to "BlackRock Technology and Private Equity Term Trust" with a new ticker symbol "BTX."

Management Transition: The Trust will replace its current portfolio management team with Tony Kim and Reid Menge effective February 20, 2025, while seeking shareholder approval for certain changes related to industry concentration and diversification status.

Tender Offers Announcement: BlackRock Innovation and Growth Term Trust (BIGZ) and BlackRock Health Sciences Term Trust (BMEZ) will conduct cash tender offers to buy back 50% and 40% of their outstanding shares, respectively, at a price of 99.5% of their net asset value (NAV).

Agreement with Saba Capital: Saba Capital Management has entered into standstill agreements with BlackRock, allowing it to tender all its shares and withdraw shareholder proposals while adhering to certain covenants for three years.