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Boaz Weinstein's Hedge Fund Battle with Neuberger Berman Gets More Heated

Boaz Weinstein’s

hedge fund Saba Capital Management LP faced a setback in its wrangle with Neuberger Berman Group LLC for more power over its investment in one of Neuberger’s funds.

In a battle with potentially high stakes that could give investors more say in vehicles called closed-end funds, Saba Capital proposed changes that shareholders voted on last week.

Saba said it won more votes than Neuberger on all three of its propositions, which Neuberger didn’t dispute. But Saba notched only one clear-cut win: for the fund to consider a self-tender offer to buy back shares.

Both firms disagree about much of the rest of the results. Neuberger announced the vote’s preliminary outcome on Tuesday, setting off a round of finger-pointing in an already feisty fight.

In a news release Tuesday, Neuberger said shareholders “resoundingly rejected” Saba’s motions, a conclusion it said it reached by “excluding votes from Saba and other entities that follow” Saba.

Saba disputed that conclusion. “It is abhorrent that Neuberger would seek to blatantly mislead shareholders about the outcome of this important election,” Mr. Weinstein said in a statement.

Mr. Weinstein’s Saba is a hedge fund, buying up large positions in closed-end funds and trying to force changes, such as overhauling the board. The fund operators often resist.

Closed-end funds are a type of mutual fund. They hold securities and, like exchange-traded funds, are listed on exchanges. But while ETF share prices typically track the price of the underlying securities, closed-end funds often don’t. The Neuberger fund has been trading at a discount.

In closed-end-fund investments, Saba is hoping to profit when the share prices move more closely in line with the underlying assets’ value. Strategies include agitating for the funds to make governance changes such as converting to open-ended portfolios, or selling the underlying assets and returning money to shareholders.

At issue in last week’s vote were Saba’s three proposals: changes to the makeup of the fund’s board, swapping out the fund’s investment management, and a potential self-tender offer to buy back shares.

While Saba won more votes on the propositions, only the self-tender proposal passed, given Neuberger’s rules. Neuberger said it would consider that proposal.

“Saba failed to achieve the requisite vote to elect their nominees and on their proposal to terminate the Fund’s investment management agreement,” Neuberger’s spokesman

Alexander Samuelson


Michael D’Angelo,

Saba’s general counsel, took issue with Neuberger’s characterization of the results.

“Although Saba received 50% more votes for its nominees than Neuberger did for their nominees, because of the high election standard implemented by the Fund, neither slate of directors were elected,” he said in an email. “Any statement saying that Neuberger won the election of directors is categorically false.”

Mr. D’Angelo declined to comment about Neuberger’s description of the investment management proposal results.

In another sign of how heated the battle has become, a lawyer at an outside law firm advising Saba said Neuberger broke Securities and Exchange Commission rules by allegedly mischaracterizing the voting results in its Tuesday statement. Spokespeople for Neuberger and the SEC declined to comment on the allegation.

In recent months, Saba has also been embroiled in fights with other asset managers, including

BlackRock Inc.

Share Your Thoughts

What do you think Saba Capital’s next steps are regarding Neuberger Berman? Join the conversation below.

Write to Rachael Levy at

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