BlackRock Tech and Private Equity Term Stock Price, News & Analysis

BlackRock Technology and Private Equity Term Trust (BTX) is an exchange-listed closed-end management investment company. According to its stated objective, the Trust seeks to provide total return and income through a combination of current income, current gains and long-term capital appreciation. The Trust focuses on investing in equity securities issued by mid- and small-capitalization companies that its adviser believes have above-average earnings growth potential.

The Trust is associated with BlackRock, which describes its purpose as helping more people experience financial well-being and acting as a fiduciary to investors. BTX is part of a group of BlackRock term trusts that also includes BlackRock Health Sciences Term Trust (BMEZ) and BlackRock Science and Technology Term Trust (BSTZ). These funds are referenced together in BlackRock communications discussing managed distribution plans and fund updates.

Investment objective and strategy

BTX’s investment objective is to generate total return and income by combining current income, current gains and long-term capital appreciation. Based on the Trust’s description, it invests in equity securities of mid- and small-capitalization companies that its adviser believes have above-average earnings growth potential. This focus on equity securities and growth potential aligns BTX with an equity-oriented strategy targeting companies that may be earlier in their growth trajectories compared to large-cap issuers.

The Trust is described as a term trust, which places it within a category of closed-end funds that typically have a defined life. In public communications, BTX is grouped with other BlackRock term trusts that are referred to as equity funds. These funds operate under managed distribution plans that govern how they make regular distributions to shareholders.

Managed distribution plan and level-rate distributions

BlackRock has disclosed that the Board of Trustees of BlackRock Technology and Private Equity Term Trust approved updates to the Fund’s managed distribution plan. The Board determined that BTX would change from a floating rate distribution to a level rate distribution at a stated monthly rate. These changes were described as seeking to enhance distribution stability while maintaining a competitive distribution rate and offering the potential to grow the Fund’s net asset value, and, in a related communication, as helping to manage the proportion of public and private investments across the affected funds.

Under its managed distribution plan, BTX is expected to distribute all available investment income to its shareholders, consistent with its investment objectives and as required by the Internal Revenue Code. If sufficient income, including net investment income and short-term capital gains, is not available on a monthly basis, the Fund may distribute long-term capital gains and/or return of capital to maintain a level distribution. BlackRock has noted that the fixed amounts distributed per share or distribution rate are subject to change at the discretion of the Fund’s Board of Trustees.

Return of capital and distribution sources

In regulatory notices and press releases, BlackRock has provided estimated allocations of BTX’s distributions among net income, net realized short-term gains, net realized long-term gains and return of capital. For certain periods referenced, BTX’s distributions were estimated to consist entirely of return of capital. BlackRock has explained that a return of capital may occur when some or all of a shareholder’s investment is paid back to the shareholder, and that such distributions do not necessarily reflect the Fund’s investment performance and should not be confused with yield or income. When distributions exceed total return performance, the difference reduces the Fund’s net asset value per share.

The amounts and sources of distributions reported in these notices are characterized as estimates provided to meet regulatory requirements and not for tax reporting purposes. The final determination of the source and tax characteristics of all distributions for a given year is made after the end of the year, and shareholders receive a Form 1099-DIV for federal income tax reporting.

Tender offer activity

BlackRock Technology and Private Equity Term Trust has conducted a tender offer to repurchase a portion of its outstanding common shares. The Fund announced the commencement of an offer to repurchase up to 50% of its outstanding common shares at a price per share equal to 99.5% of the Fund’s net asset value per common share as determined on the pricing date. The Board of Trustees approved the commencement, expiration and pricing dates for this tender offer, and the terms were set forth in an Offer to Purchase and related documents filed with the U.S. Securities and Exchange Commission.

Following the expiration of the tender offer, BTX announced preliminary and then final results. The tender offer was undersubscribed, and, in accordance with its terms, the Fund stated that it would purchase all shares properly tendered from all tendering shareholders. The purchase price was equal to 99.5% of the Fund’s net asset value per share as of the close of regular trading on the New York Stock Exchange on the business day immediately following the expiration date. BlackRock emphasized that the press releases describing the tender offer were for informational purposes only and that the actual offer to purchase was made solely pursuant to the formal tender offer documents filed with the SEC.

Performance and distribution metrics

In connection with its managed distribution plan, BlackRock has published performance and distribution rate information for BTX, including average annual total return in relation to net asset value over a multi-year period, the annualized current distribution rate expressed as a percentage of net asset value, cumulative total return for the fiscal year to date, and cumulative fiscal year distributions as a percentage of net asset value. For BTX, these metrics were presented with a note indicating that the portfolio was launched within the past five years and that the performance and distribution rate information reflected data from inception to the measurement date.

BlackRock has cautioned shareholders not to draw conclusions about a Fund’s investment performance from the amount of current distributions or from the terms of the managed distribution plan. The Board reviews each plan on an ongoing basis to determine whether it should be continued, modified or terminated, and may amend, suspend or terminate a plan at any time without prior notice if it deems such actions to be in the best interest of the Fund or its shareholders.

Fund information and reporting

BlackRock states that it updates performance and certain other data for BTX on a monthly basis on its website in the closed-end funds section, along with other material information as necessary. Investors are advised that annual and semi-annual reports and other regulatory filings of the Fund are accessible on the SEC’s website and on BlackRock’s website, and that these documents may discuss factors that affect the Fund. The information contained on BlackRock’s website is described as not being part of the press releases.

As a registered investment company, BlackRock Technology and Private Equity Term Trust is subject to the Investment Company Act of 1940. In connection with its distributions, BlackRock has referenced Section 19 of the 1940 Act and the requirement to post Section 19 notices to the DTC bulletin board and send them to shareholders of record when applicable. These notices are provided for informational purposes only and not for tax reporting purposes.

Position within sector and industry classification

The Trust is classified under the sector "Information" and the industry "Television Broadcasting" in the provided data. At the same time, its stated investment focus is on equity securities of mid- and small-capitalization companies that its adviser believes have above-average earnings growth potential, and it is grouped by BlackRock with other equity term trusts focused on health sciences, science and technology, and technology and private equity. This combination of classification and stated strategy indicates that BTX is structured as an equity-focused closed-end term trust managed within BlackRock’s broader platform of specialized sector and thematic funds.

Key characteristics

• Structure: Closed-end management investment company organized as a term trust.
• Objective: To provide total return and income through current income, current gains and long-term capital appreciation.
• Primary assets: Equity securities of mid- and small-capitalization companies that the adviser believes have above-average earnings growth potential.
• Manager: Associated with BlackRock, which acts as a fiduciary to investors and provides financial technology and investment management services across its fund lineup.
• Distributions: Governed by a managed distribution plan; has transitioned from a floating rate distribution to a level rate distribution at a stated monthly rate, subject to change by the Board of Trustees.
• Capital actions: Has undertaken a tender offer to repurchase up to 50% of its outstanding common shares at a price tied to net asset value.

Investors researching BTX can review its prospectus, annual and semi-annual reports, and other SEC filings for detailed information on its investment policies, risks, fees and expenses. BlackRock’s public communications emphasize that estimates of distribution sources and performance metrics are subject to change and that formal regulatory filings provide the authoritative record of the Fund’s operations.