Saba Capital Management, a $1.7 billion hedge fund run by Boaz Weinstein, has sued BlackRock Inc., BLK 1.63% arguing the world’s largest asset manager has moved to block outsiders from gaining board seats at three of its funds and effecting change.
In two lawsuits filed late Tuesday, Saba alleged that BlackRock’s actions run counter to the high-profile stance the firm and its chief executive, Larry Fink, have taken on corporate-governance matters in recent years. In annual letters to chief executives and other communications, Mr. Fink and BlackRock have urged companies whose shares the firm holds to more actively engage with investors.
“BlackRock purports to be a defender of good corporate governance while entrenching its favored board members and disenfranchising thousands of investors in BlackRock’s own products,” Mr. Weinstein, Saba’s founder and a well-known Wall Street financier, said in a statement.
In a statement about the lawsuits, a BlackRock spokesman said: “Our clients invest in these strategies to achieve specific outcomes, most often it’s to generate income, including tax-advantaged income, that they rely on. Saba’s hedge fund is trying to disrupt these strategies so Saba can enrich themselves through a short-term trade at the expense of the funds’ longer-term shareholders, while potentially subjecting shareholders to unanticipated tax consequences.”