{"id":53595,"date":"2023-08-27T11:27:01","date_gmt":"2023-08-27T15:27:01","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/ecat-activist-saba-capital-has-been-buying-this-cef-nyseecat\/"},"modified":"2023-08-27T11:27:05","modified_gmt":"2023-08-27T15:27:05","slug":"ecat-activist-saba-capital-has-been-buying-this-cef-nyseecat","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=53595","title":{"rendered":"ECAT: Activist Saba Capital Has Been Buying This CEF (NYSE:ECAT)"},"content":{"rendered":"
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The investment objective of BlackRock ESG Capital Allocation Trust (NYSE:ECAT<\/span>) is to provide both total return and income. The fund uses a highly flexible approach and has the ability to invest in both public and private markets across asset classes. They look to identify untapped growth opportunities tied to the evolution of ESG.<\/span><\/p>\n

My personal opinion is that the ESG concept is somewhat overhyped and oversold. But I don’t mind investing in a fund like ECAT which may get a small edge investing in “good” companies. There is definitely an appetite for ESG-style investing from some large institutional investors.<\/p>\n

The fund is well diversified. There were 367 holdings listed as of July 31, 2023. ECAT currently writes options on about 12% of the portfolio to generate additional income and enhance risk adjusted returns. The Trust invests at least 80% of total assets in securities that meet the ESG criteria described in the prospectus and shareholder reports.<\/span><\/p>\n

ECAT does not use financial leverage directly by borrowing to make additional investments. But it occasionally uses derivatives, which is a form of economic leverage.<\/p>\n

The trust is run by a strong management team led by Rick Rieder who is the head portfolio manager and the Chief Financial officer of Global fixed Income at BlackRock. Rick personally owns 187,316 shares of the fund with a value of around $2.85 million. But he recently sold 19,052 shares at $15.358 a share on July 3, 2023.<\/p>\n

A Fund Activist Is Involved<\/strong><\/h2>\n

Saba Capital, the activist investment firm run by Boaz Weinstein, has been consistently adding to its stake in ECAT. Boaz Weinstein has been involved in several proxy battles with BlackRock closed-end funds including ECAT, BCAT and BIGZ. He often posts about these proxy battles on his Twitter feed. I’ve linked to two of his posts below, and there are many more posts about the BlackRock closed-end funds.<\/p>\n

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Saba Capital runs (CEFS) which is a fund-of-fund ETF that manages about $120 million and contains many closed-end funds where Saba Capital is taking an activist stance to elect new board members or enact other shareholder friendly actions such as tender offers, share buybacks, conversions to ETFs or open-end funds or fund liquidations.<\/p>\n

As of August 22, 2023, the largest holding in CEFS was (ECAT) which was over 18% of the portfolio NAV. The total holdings of ECAT by Saba Capital across all of Saba’s funds is now a whopping 13,687,677 shares worth around $207 million. This is about 13% of the ECAT shares.<\/p>\n

Some other activist style investors also own shares of ECAT including Rivernorth Capital with 5,482,077 shares. Overall, around 39% of ECAT shares are owned by institutions.<\/p>\n

Here are some recent ECAT buys by Saba Capital:<\/p>\n

ECAT – Recent Saba Capital Buys<\/strong><\/h3>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n
\n

Trade Date<\/p>\n<\/td>\n

\n

Insider<\/p>\n<\/td>\n

\n

# shares<\/p>\n<\/td>\n

\n

price<\/p>\n<\/td>\n<\/tr>\n

\n

08\/24\/2023<\/p>\n<\/td>\n

\n

Saba Capital<\/p>\n<\/td>\n

\n

54,411<\/p>\n<\/td>\n

\n

$15.15<\/p>\n<\/td>\n<\/tr>\n

\n

08\/23\/2023<\/p>\n<\/td>\n

\n

Saba Capital<\/p>\n<\/td>\n

\n

97,606<\/p>\n<\/td>\n

\n

$15.17<\/p>\n<\/td>\n<\/tr>\n

\n

08\/21\/2023<\/p>\n<\/td>\n

\n

Saba Capital<\/p>\n<\/td>\n

\n

243,551<\/p>\n<\/td>\n

\n

$15.10<\/p>\n<\/td>\n<\/tr>\n

\n

08\/18\/2023<\/p>\n<\/td>\n

\n

Saba Capital<\/p>\n<\/td>\n

\n

12,498<\/p>\n<\/td>\n

\n

$15.05<\/p>\n<\/td>\n<\/tr>\n

\n

07\/06\/2021<\/p>\n<\/td>\n

\n

Saba Capital<\/p>\n<\/td>\n

\n

21,823<\/p>\n<\/td>\n

\n

$15.61<\/p>\n<\/td>\n<\/tr>\n

\n

06\/30\/2021<\/p>\n<\/td>\n

\n

Saba capital<\/p>\n<\/td>\n

\n

41,361<\/p>\n<\/td>\n

\n

$15.66<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

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