Saba Capital Income & Opportunities Fund II

Boaz Weinstein, Saba Capital's founder and CIO, has final authority over the firm's closed-end fund activist strategy and the portfolio decisions within the Income & Opportunities Fund II. Weinstein established Saba in 2009 after a proprietary trading career at Deutsche Bank, and he has served as the public face of every major campaign, from early targets like the BlackRock Municipal Target Term Trust to the 2024 proxy fight against seven BlackRock funds. No separate sub-advisor or co-CIO structure is publicly disclosed for this fund.

The fund invests in closed-end funds trading at a discount to their net asset value and then wages public activist campaigns — proxy contests, shareholder proposals, tender offers, and litigation — to force the fund's board to liquidate, open-end, or otherwise close the discount gap. When successful, the gap between the discounted purchase price and the realized net asset value becomes the fund's return, less campaign costs. This model makes returns event-driven and governance-linked rather than purely a function of the underlying portfolio assets.

It is a closed-end fund itself, designed as a permanent capital vehicle that invests in other closed-end funds, making it a fund-of-funds structure with an activist overlay. Unlike a typical private hedge fund with quarterly liquidity, the Income & Opportunities Fund II is itself publicly traded, which creates a layer of irony — investors in Saba's fund effectively bet on Weinstein's team to arbitrage the discount of other funds, while facing their own fund's potential discount in the public market.

Saba Capital and BlackRock have been locked in a multi-year governance battle over a series of BlackRock-managed closed-end funds. Weinstein has repeatedly targeted BlackRock funds trading at persistent discounts, arguing that the boards have failed shareholders. The conflict escalated in December 2024 when Saba nominated dissident trustee candidates across seven BlackRock funds, following prior campaigns that resulted in some funds agreeing to tender offers or liquidation timelines.

The Income & Opportunities Fund II is a dedicated, publicly listed vehicle focused exclusively on closed-end fund arbitrage and activism, while Saba's core hedge fund platform runs a broader multi-strategy credit mandate that can include corporate bonds, structured credit, and volatility trading alongside closed-end fund positions. The fund-of-funds wrapper means its own shareholders are structurally one layer removed from the direct campaigns — they hold shares in Saba's vehicle, not the underlying target funds.

As a publicly traded closed-end fund, the fee structure is disclosed in regulatory filings and typically includes a management fee on assets plus an incentive fee tied to performance — but the exact fee schedule changes with each share class and offering. Because the fund is registered and publicly listed, it is subject to different regulatory and disclosure standards than Saba's private offshore hedge funds, and investors can exit by selling shares in the secondary market rather than redeeming.

Three risks define the fund's profile. First, governance risk — if the proxy fights fail and target fund boards refuse to act, the discount can persist or widen, leaving the position underwater. Second, concentration risk — Saba often builds outsized positions in a limited number of target funds, magnifying the impact of any single failed campaign. Third, structural risk — as a publicly traded fund, the Income & Opportunities Fund II can itself trade at a discount, creating a meta-layer of the very problem it is designed to exploit in others, which Weinstein must manage through share buybacks or shareholder communications.