Greqt_老虎社区_美港股上老虎

2021-07-31

Greqt

It’s Open Season on Closed-End Fund Activists. How Fund Holders Can Win—and Lose<blockquote>现在是封闭式基金活动家的开放季节。基金持有人如何赢得和失败</blockquote>

免责声明：上述内容仅代表发帖人个人观点，不构成本平台的任何投资建议。

精彩评论

我们需要你的真知灼见来填补这片空白

发表看法

{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":802940313,"tweetId":"802940313","gmtCreate":1627710514332,"gmtModify":1631888932656,"author":{"id":3586955264029856,"idStr":"3586955264029856","authorId":3586955264029856,"authorIdStr":"3586955264029856","name":"yteaaron88","avatar":"https://static.tigerbbs.com/b5a9adeb4d55b3f87731ddb20a7b5fba","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":11,"crmLevelSwitch":0,"individualDisplayBadges":[],"wearingBadges":[],"fanSize":1,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"title":"","extraTitle":"","html":"<html><head></head><body>Greqt</body></html>","htmlText":"<html><head></head><body>Greqt</body></html>","text":"Greqt","highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/802940313","repostId":1138566016,"repostType":4,"repost":{"id":"1138566016","kind":"news","pubTimestamp":1627689251,"share":"https://www.laohunote.com/m/news/1138566016?lang=zh_CN&edition=full","pubTime":"2021-07-31 07:54","market":"us","language":"en","title":"It’s Open Season on Closed-End Fund Activists. How Fund Holders Can Win—and Lose<blockquote>现在是封闭式基金活动家的开放季节。基金持有人如何赢得和失败</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1138566016","media":"Barron's","summary":"TheTempleton Global Incomefund frustrated investors for years. Despite star manager Michael Hasensta","content":"TheTempleton Global Incomefund frustrated investors for years. Despite star manager Michael Hasenstab at the helm, the closed-end fund returned an average of 0.3% annually in the past decade, versus an average 7% for peers in global income. Also frustrating, its shares rarely traded close to the fund’s underlying net asset value, or NAV. The discount averaged 11% in the past three years.<blockquote>邓普顿全球收益基金多年来一直让投资者感到沮丧。尽管明星经理迈克尔·哈森斯塔布 (Michael Hasenstab) 掌舵，但该封闭式基金在过去十年中的平均年回报率为 0.3%，而全球同行的平均年回报率为 7%。同样令人沮丧的是，该基金的股票交易很少接近基金的标的资产净值（NAV）。过去三年平均折扣为11%。</blockquote> Investors have caught a break, however, thanks to Saba Capital Management, a hedge fund shop run by activist investor Boaz Weinstein. Saba amassed a 20% stake in the Templeton fund and recently won four contested board seats. It has been pressuring the board to take actions to boost the share price. Its moves have paid off: The fund has returned a total 4.5% this year as its share price improved, and the discount to NAV has shrunk to 4%.<blockquote>然而，多亏了激进投资者博阿兹·韦恩斯坦 (Boaz Weinstein) 经营的对冲基金公司 Saba Capital Management，投资者才得以突破。萨巴持有邓普顿基金 20% 的股份，最近赢得了四个有争议的董事会席位。它一直在向董事会施压，要求其采取行动提高股价。其举措取得了成效：随着股价上涨，该基金今年的总回报率为 4.5%，资产净值折扣已缩小至 4%。</blockquote> Tactics like Saba’s have long infuriated mutual fund companies; no one wants a hedge fund threatening a coup. Now, with some help from Congress, the playing field could tilt in favor of closed-end funds and their company sponsors, due to a bill recently introduced in the House. That could work against the interests of fund investors.<blockquote>像萨巴这样的策略长期以来一直激怒着共同基金公司；没有人希望对冲基金发动政变。现在，由于众议院最近提出的一项法案，在国会的帮助下，竞争环境可能会向封闭式基金及其公司赞助商倾斜。这可能会损害基金投资者的利益。</blockquote> The Increasing Investor Opportunities Act, introduced in June by Rep. Anthony Gonzalez (R., Ohio) and Rep. Gregory Meeks (D., New York), includes two measures that could make it much tougher for hedge funds to pressure closed-end funds and win proxy fights. One proposed change would lift the current 15% limit on closed-end-fund ownership of illiquid private funds, such as venture-capital and private-equity funds. A second measure would prevent activist hedge funds from acquiring more than 10% of a closed-end fund’s shares.<blockquote>众议员安东尼·冈萨雷斯（俄亥俄州共和党）和众议员格雷戈里·米克斯（纽约州民主党）于6月提出的《增加投资者机会法案》包括两项措施，可能会使对冲基金更难向封闭式基金施压并赢得代理权之争。一项拟议的改变将取消目前对风险投资和私募股权基金等非流动性私募基金的封闭式基金所有权15%的限制。第二项措施将阻止激进对冲基金收购封闭式基金 10% 以上的股份。</blockquote> A spokesman for Gonzalez declined to comment. Meeks didn’t respond to requests for comment.<blockquote>冈萨雷斯的发言人拒绝置评。米克斯没有回应置评请求。</blockquote> Proponents of the changes say they would expand access to private markets for retail investors. They also say hedge funds are exploiting gaps in securities laws at a cost to long-term shareholders, saddling them with tax liabilities, higher fees, and forced fund liquidations. The bill would eliminate a “loophole that activist investors have used to extract short-term profits at the expense of retail investors,” the Investment Company Institute, or ICI, said in a recent statement.<blockquote>这些变化的支持者表示，他们将扩大散户投资者进入私人市场的机会。他们还表示，对冲基金正在利用证券法的漏洞，以牺牲长期股东的利益为代价，让他们背负纳税义务、更高的费用和强制基金清算。投资公司协会（ICI）在最近的一份声明中说，该法案将消除 “激进投资者以散户投资者为代价获取短期利润的漏洞”。</blockquote> Hedge funds and portfolio managers who invest in closed-end funds say that mutual fund companies are simply trying to protect a pool of assets and fees from shareholder interference. Most retail investors don’t vote their shares in proxy contests. That may leave fund boards largely free to pursue their own agendas.<blockquote>投资于封闭式基金的对冲基金和投资组合经理表示，共同基金公司只是试图保护资产池和费用免受股东干预。大多数散户投资者不会在代理权竞争中投票。这可能会让基金董事会在很大程度上自由地追求自己的议程。</blockquote> “Activism plays an important role, and if this bill passes, it will become more difficult for activists to threaten or create changes,” says Matt Buffington, a portfolio manager at Dryden Capital, an activist hedge fund.<blockquote>“激进主义发挥着重要作用，如果这项法案获得通过，激进分子将更难威胁或创造变革，”激进主义对冲基金德莱顿资本（Dryden Capital）的投资组合经理马特-巴芬顿（Matt Buffington）说。</blockquote> Gregory Neer, a portfolio manager with Relative Value Partners, an advisory firm that invests in closed-end funds, agrees. “The ability for investors to pressure funds is beneficial to all shareholders,” he says.<blockquote>投资封闭式基金的咨询公司 Relative Value Partners 的投资组合经理 Gregory Neer 对此表示同意。“他说：”投资者向资金施压的能力对所有股东都有好处。</blockquote> Closed-end funds have long been popular with investors due to their high yields and steady distributions. Many use leverage, borrowing money at market rates to boost payouts. They also generate income with options strategies and investments in high-yielding areas of the stock and bond markets.<blockquote>封闭式基金因其收益率高、分布稳定等特点，长期以来备受投资者欢迎。许多人使用杠杆，以市场利率借钱来增加支出。他们还通过期权策略以及对股票和债券市场高收益领域的投资产生收入。</blockquote> But the funds have structural drawbacks. Expense ratios are steep, averaging 2.1%, according to Morningstar Direct. And since the funds have a fixed number of shares outstanding, prices reflect market demand for both a fund and its underlying assets. Funds usually trade at a discount to NAV. While it is attractive, in theory, to pay 90 cents for a dollar of assets, investors might never see the extra dime.<blockquote>但这些基金存在结构性缺陷。根据晨星直接的数据，费用率很高，平均为 2.1%。由于这些基金拥有固定数量的流通股，价格反映了市场对基金及其标的资产的需求。基金的交易价格通常低于资产净值。虽然从理论上讲，为一美元的资产支付90美分是有吸引力的，但投资者可能永远不会看到额外的一毛钱。</blockquote> Hedge funds aim to exploit this inefficiency, buying closed-end funds at below-market value. They then pressure fund boards to take steps to lift the funds’ prices. The playbook is straightforward: accumulate a stake, win board seats, and then force a fund company into a tender offer, whereby it agrees to repurchase shares at nearly full price.<blockquote>对冲基金旨在利用这种低效率，以低于市场价值的价格购买封闭式基金。然后，他们向基金董事会施压，要求其采取措施提高基金价格。策略很简单：积累股份，赢得董事会席位，然后迫使基金公司提出要约收购，同意以接近全价回购股票。</blockquote> If that fails, a hedge fund might try to replace a fund’s manager, orchestrate a liquidation of the fund, or get it converted to an open-end fund—moves that could also pay off with the share price rising to parity with the NAV. Firms like Saba have also taken over funds entirely.<blockquote>如果失败，对冲基金可能会尝试更换基金经理、安排基金清算，或者将其转换为开放式基金--这些举措也可能在股价上涨至与资产净值持平的情况下获得回报。像Saba这样的公司也完全接管了基金。</blockquote> Giving closed-end funds freedom to own more private securities could throw a wrench into the strategy. Tender offers work only if a fund can liquidate most of its holdings at market prices. Because venture-capital and private-equity holdings generally don’t trade publicly, their pricing isn’t transparent. “When closed-end funds invest in illiquid things, it protects them from activism,” one activist manager tellsBarron’s.<blockquote>给予封闭式基金持有更多私人证券的自由可能会给该战略带来麻烦。只有当基金能够以市场价格清算其大部分持有的股份时，要约收购才有效。由于风险投资和私募股权通常不公开交易，因此它们的定价并不透明。“一位激进主义经理说：”当封闭式基金投资于非流动性资产时，就能保护它们免受激进主义的影响。巴伦.</blockquote> Removing the cap on private-fund ownership is “in line with a legislative agenda of getting retail investors more access to private investments,” says Thomas DeCapo, an attorney for the mutual fund industry.<blockquote>共同基金行业律师托马斯-德卡波（Thomas DeCapo）说，取消私募基金所有权上限 “符合让散户投资者有更多机会获得私人投资的立法议程”。</blockquote> And capping activists at 10% of a fund doesn’t stop them from mounting proxy campaigns. “Nothing about this is antidemocratic,” he says. “It doesn’t stop a majority of investors who are unhappy or want change. It stops one investor from using its economic power, with other people’s money, to basically force changes on everybody else.”<blockquote>将激进分子的份额限制在基金的 10% 并不能阻止他们发起代理人运动。“他说：”这一切都不反民主。“这并不能阻止大多数不满意或希望改变的投资者。它阻止了一个投资者利用自己的经济权力，用别人的钱，基本上迫使其他人做出改变”。</blockquote> Investor advocates see it differently, however, saying fund investors could wind up paying higher fees for funds that hold more-opaque investments. “It’s just another fund-of-funds structure, and those are notoriously high-fee,” says Tyler Gellasch, head of Healthy Markets, an investor-protection group.<blockquote>然而，投资者倡导者有不同的看法，他们表示，基金投资者最终可能会为持有更不透明投资的基金支付更高的费用。“投资者保护组织 Healthy Markets 的负责人泰勒-格拉施（Tyler Gellasch）说：”这只是另一个基金中的基金结构，而且这些基金的费用是出了名的高。</blockquote> Individual hedge funds technically can’t own more than 3% of a closed-end fund, under ownership restrictions in the Investment Company Act of 1940. But they skirt the rule by building stakes through affiliated entities, creating enough of a critical mass to force changes at a fund through proxy voting.<blockquote>根据 1940 年《投资公司法》（Investment Company Act）的所有权限制，从技术上讲，单个对冲基金持有的封闭式基金不得超过 3%。但他们通过附属实体建立股份来规避规则，创造足够的临界质量，通过代理投票迫使基金发生变化。</blockquote> The ICI—the mutual fund industry’s lobby—has tried to persuade regulators to crack down on hedge funds. In a submission to the Securities and Exchange Commission last year, the ICI argued that hedge fund campaigns often consume a fund’s resources, trigger tax liabilities for long-term investors, and result in the forced selling of securities to meet a hedge fund’s demands for a tender offer. A fund’s expense ratio could increase if it is forced to buy back shares and its asset base shrinks.<blockquote>ICI--共同基金行业的游说团体--试图说服监管机构打击对冲基金。在去年提交给美国证券交易委员会的一份文件中，ICI 认为对冲基金活动往往会消耗基金的资源，引发长期投资者的纳税义务，并导致被迫出售证券以满足对冲基金的要约收购要求。如果基金被迫回购股票，而其资产基础缩水，那么基金的费用率可能会上升。</blockquote> The activist community’s “assault” on the industry has had a chilling effect on product launches, the ICI said, resulting in fewer closed-end funds on the market today than in 2007.<blockquote>ICI 表示，激进社区对行业的 “攻击 ”对产品发布产生了寒蝉效应，导致目前市场上的封闭式基金数量少于 2007 年。</blockquote> But hedge funds argue that changing the 1940 act would amount to a power grab by mutual funds. “This is all coming from the mutual fund industry, and it’s no coincidence that this protects them,” says Phil Goldstein, co-founder of Bulldog Investors, an activist that has long targeted closed-end funds. “There are funds with terrible performance and wide discounts. The ICI never says we need a mechanism where shareholders can hold those managers accountable.”<blockquote>但对冲基金认为，修改 1940 年法案将相当于共同基金的权力攫取。“斗牛犬投资者公司（Bulldog Investors）的联合创始人菲尔-戈尔茨坦（Phil Goldstein）说：”这一切都来自共同基金行业，这保护了他们绝非巧合。“有些基金业绩糟糕，折扣幅度很大。ICI 从未说过我们需要一种机制，让股东追究这些经理的责任。”</blockquote> Imposing an ownership cap would also make proxy campaigns less economic. Limited to 10%, hedge funds wouldn’t own enough shares, with sufficient economic interest, to justify the expense of a proxy contest, which can cost millions of dollars. “If you’re limited to 10% and have to spend 2.5% of your assets on a proxy campaign, you’d say it’s too risky,” says Goldstein. “Meanwhile, management isn’t spending anything—just shareholder money. They want to make it economically unattractive to run a proxy contest.”<blockquote>施加所有权上限也会降低代理人竞选活动的经济性。如果被限制在 10%，对冲基金就不会拥有足够的股份，也不会有足够的经济利益来证明代理权争夺的费用是合理的，而代理权争夺可能会花费数百万美元。“戈尔茨坦说：”如果你被限制在 10%，却不得不将 2.5% 的资产用于代理竞选活动，你会说这太冒险了。“与此同时，管理层什么都不花--只是股东的钱。他们想让代理权竞争在经济上变得没有吸引力”。</blockquote> Regulators and courts have expressed skepticism about some defenses that closed-end funds have adopted to prevent shareholder challenges. And, the SEC might not side with the fund industry. Since 2010, the SEC has warned fund companies against using state securities laws to thwart hedge fund takeovers. The SEC dropped its objection to these state “control share” laws last year under its Republican chairman, Jay Clayton. But the new, Democratic chairman, Gary Gensler, might reinstate the SEC’s objection—a reason for the industry to enlist Congress to change the law. The SEC didn’t respond to requests for comment.<blockquote>监管机构和法院对封闭式基金为防止股东挑战而采取的一些辩护措施表示怀疑。而且，美国证券交易委员会可能不会站在基金业一边。自2010年以来，美国证券交易委员会一直警告基金公司不要利用州证券法阻挠对冲基金收购。去年，在共和党主席杰伊-克莱顿（Jay Clayton）的领导下，美国证券交易委员会放弃了对这些州 “控制份额 ”法律的反对。但民主党新任主席加里-根斯勒（Gary Gensler）可能会恢复美国证券交易委员会的反对意见--这也是该行业争取国会修改法律的理由。美国证券交易委员会没有回应置评请求。</blockquote> Institutional Shareholder Services,a firm that makes recommendations on proxy voting, says investors should reject fund companies’ use of state control-share laws, which limit the voting rights of shareholders. With the SEC on the sidelines, ISS says, “CEF shareholders are denied important voting rights and are subject to management entrenchment.”<blockquote>机构股东服务公司（Institutional Shareholder Services）是一家就代理投票提出建议的公司，该公司表示，投资者应拒绝基金公司利用限制股东投票权的州控股法。ISS 表示，由于美国证券交易委员会（SEC）置身事外，“CEF 股东被剥夺了重要的投票权，并受到管理层的巩固”。</blockquote> <img src=\"https://static.tigerbbs.com/70323ed9daef142f19afd48be72b6299\" tg-width=\"755\" tg-height=\"334\" referrerpolicy=\"no-referrer\"><img src=\"https://static.tigerbbs.com/68beb47d59eb02e90b04eb7093f9f17b\" tg-width=\"759\" tg-height=\"285\" referrerpolicy=\"no-referrer\">Hedge funds don’t always win, but investors might want to ride along as activists build a stake. “When an activist comes in, you usually see an increase in the share price and a decrease in the discount,” says Matt Souther, an associate finance professor at the University of South Carolina.<blockquote>对冲基金并不总是能赢，但投资者可能希望在激进分子入股时顺风顺水。“南卡罗来纳大学金融学副教授马特-索瑟（Matt Souther）说：”当激进分子进来时，你通常会看到股价上涨，折扣减少。</blockquote> Templeton Global Income’s (ticker: GIM) discount to NAV could narrow further if Saba acquires more shares or tries to take over the fund’s $743 million in assets. Saba recently took over management of another fund, Voya Prime Rate Trust, which it rebrandedSaba Capital Income &amp; Opportunities(BRW).Franklin Templetonand Saba declined to comment.<blockquote>如果 Saba 收购更多股份或试图接管该基金 7.43 亿美元的资产，邓普顿全球收入公司（股票代码：GIM）对资产净值的折扣可能会进一步缩小。Saba 最近接管了另一只基金 Voya Prime Rate Trust 的管理权，并将其更名为 Saba Capital Income &amp; Opportunities (BRW)。富兰克林邓普顿和 Saba 拒绝置评。</blockquote> Miller/Howard High Income Equity(HIE) is also in Saba’s crosshairs. The fund is a “term trust” with a mandated liquidation date in 2024. It trades at a 5.9% discount to NAV. “In a worst-case scenario, you buy it at a discount and you’ll earn an excess return from now to 2024 because that discount will narrow,” says Patrick Galley, co-manager ofRiverNorth Opportunities(RIV), a closed-end fund that owns HIE.<blockquote>Miller/Howard High Income Equity（HIE）也是 Saba 的目标。该基金是一个 “定期信托”，规定清算日期为 2024 年。其交易价格较资产净值折扣 5.9%。“拥有 HIE 的封闭式基金 FriverNorth Opportunities（RIV）的联席经理帕特里克-加利（Patrick Galley）说：”在最坏的情况下，你会以折扣价买入，从现在到 2024 年，你将获得超额回报，因为折扣价会缩小。</blockquote> Other closed-end funds in which Saba owns stakes includeSource Capital(SOR) andInvesco Dynamic Credit Opportunities(VTA). Bulldog has built a position inTortoise Energy Independence(NDP).<blockquote>Saba 持有股份的其他封闭式基金包括 Source Capital (SOR) 和 Vesco Dynamic Credit Opportunities (VTA)。Bulldog 已经在 inTortoise Energy Independence (NDP) 建立了自己的地位。</blockquote> Some closed-end funds look attractive on their fundamentals.Adams Diversified Equity(ADX) offers exposure to big tech stocks, trades at a 14% discount to NAV, and is committed to an annualized distribution of at least 6%. “For investors who expect tech to do well, ADX is a good holding,” says David Tepper, a closed-end investor and head of Tepper Capital Management in San Francisco.<blockquote>一些封闭式基金的基本面看起来很有吸引力。 Adams Diversified Equity (ADX) 提供大型科技股的投资，交易价格较资产净值折扣 14%，并承诺年化分配至少为 6%。“旧金山封闭式投资者、泰珀资本管理公司（Tepper Capital Management）负责人大卫-泰珀（David Tepper）说：”对于期望科技股表现良好的投资者来说，ADX 是一个不错的持股选择。</blockquote> Sprott Focus Trust(FUND) is another fund he likes. Veteran small-cap manager Whitney George runs it, and his family owns 45% of the shares. It trades at a 10% discount and yields 5.7%. Tepper also favorsRoyce Global Value Trust(RGT), trading at a 9% discount and yielding 7.9%.<blockquote>Sprott Focus Trust（基金）是他喜欢的另一只基金。资深小盘股经理惠特尼·乔治 (Whitney George) 经营该公司，他的家族拥有 45% 的股份。它的交易折扣为 10%，收益率为 5.7%。泰珀还青睐罗伊斯全球价值信托 (RGT)，其交易折扣为 9%，收益率为 7.9%。</blockquote> None of these funds has attracted much activist involvement, according to securities filings. But if activists see opportunity, they could pile in and pressure fund management—assuming that Congress doesn’t rewrite the rules of engagement.<blockquote>根据证券文件，这些基金都没有吸引太多活动人士的参与。但是，如果激进分子看到了机会，他们可能会蜂拥而至，向基金管理部门施压--前提是国会不改写交战规则。</blockquote>","source":"lsy1610680873436","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>It’s Open Season on Closed-End Fund Activists. How Fund Holders Can Win—and Lose<blockquote>现在是封闭式基金活动家的开放季节。基金持有人如何赢得和失败</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIt’s Open Season on Closed-End Fund Activists. How Fund Holders Can Win—and Lose<blockquote>现在是封闭式基金活动家的开放季节。基金持有人如何赢得和失败</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nBarron's2021-07-31 07:54\n\n</h4>\n</header>\n<article>\nTheTempleton Global Incomefund frustrated investors for years. Despite star manager Michael Hasenstab at the helm, the closed-end fund returned an average of 0.3% annually in the past decade, versus an average 7% for peers in global income. Also frustrating, its shares rarely traded close to the fund’s underlying net asset value, or NAV. The discount averaged 11% in the past three years.<blockquote>邓普顿全球收益基金多年来一直让投资者感到沮丧。尽管明星经理迈克尔·哈森斯塔布 (Michael Hasenstab) 掌舵，但该封闭式基金在过去十年中的平均年回报率为 0.3%，而全球同行的平均年回报率为 7%。同样令人沮丧的是，该基金的股票交易很少接近基金的标的资产净值（NAV）。过去三年平均折扣为11%。</blockquote> Investors have caught a break, however, thanks to Saba Capital Management, a hedge fund shop run by activist investor Boaz Weinstein. Saba amassed a 20% stake in the Templeton fund and recently won four contested board seats. It has been pressuring the board to take actions to boost the share price. Its moves have paid off: The fund has returned a total 4.5% this year as its share price improved, and the discount to NAV has shrunk to 4%.<blockquote>然而，多亏了激进投资者博阿兹·韦恩斯坦 (Boaz Weinstein) 经营的对冲基金公司 Saba Capital Management，投资者才得以突破。萨巴持有邓普顿基金 20% 的股份，最近赢得了四个有争议的董事会席位。它一直在向董事会施压，要求其采取行动提高股价。其举措取得了成效：随着股价上涨，该基金今年的总回报率为 4.5%，资产净值折扣已缩小至 4%。</blockquote> Tactics like Saba’s have long infuriated mutual fund companies; no one wants a hedge fund threatening a coup. Now, with some help from Congress, the playing field could tilt in favor of closed-end funds and their company sponsors, due to a bill recently introduced in the House. That could work against the interests of fund investors.<blockquote>像萨巴这样的策略长期以来一直激怒着共同基金公司；没有人希望对冲基金发动政变。现在，由于众议院最近提出的一项法案，在国会的帮助下，竞争环境可能会向封闭式基金及其公司赞助商倾斜。这可能会损害基金投资者的利益。</blockquote> The Increasing Investor Opportunities Act, introduced in June by Rep. Anthony Gonzalez (R., Ohio) and Rep. Gregory Meeks (D., New York), includes two measures that could make it much tougher for hedge funds to pressure closed-end funds and win proxy fights. One proposed change would lift the current 15% limit on closed-end-fund ownership of illiquid private funds, such as venture-capital and private-equity funds. A second measure would prevent activist hedge funds from acquiring more than 10% of a closed-end fund’s shares.<blockquote>众议员安东尼·冈萨雷斯（俄亥俄州共和党）和众议员格雷戈里·米克斯（纽约州民主党）于6月提出的《增加投资者机会法案》包括两项措施，可能会使对冲基金更难向封闭式基金施压并赢得代理权之争。一项拟议的改变将取消目前对风险投资和私募股权基金等非流动性私募基金的封闭式基金所有权15%的限制。第二项措施将阻止激进对冲基金收购封闭式基金 10% 以上的股份。</blockquote> A spokesman for Gonzalez declined to comment. Meeks didn’t respond to requests for comment.<blockquote>冈萨雷斯的发言人拒绝置评。米克斯没有回应置评请求。</blockquote> Proponents of the changes say they would expand access to private markets for retail investors. They also say hedge funds are exploiting gaps in securities laws at a cost to long-term shareholders, saddling them with tax liabilities, higher fees, and forced fund liquidations. The bill would eliminate a “loophole that activist investors have used to extract short-term profits at the expense of retail investors,” the Investment Company Institute, or ICI, said in a recent statement.<blockquote>这些变化的支持者表示，他们将扩大散户投资者进入私人市场的机会。他们还表示，对冲基金正在利用证券法的漏洞，以牺牲长期股东的利益为代价，让他们背负纳税义务、更高的费用和强制基金清算。投资公司协会（ICI）在最近的一份声明中说，该法案将消除 “激进投资者以散户投资者为代价获取短期利润的漏洞”。</blockquote> Hedge funds and portfolio managers who invest in closed-end funds say that mutual fund companies are simply trying to protect a pool of assets and fees from shareholder interference. Most retail investors don’t vote their shares in proxy contests. That may leave fund boards largely free to pursue their own agendas.<blockquote>投资于封闭式基金的对冲基金和投资组合经理表示，共同基金公司只是试图保护资产池和费用免受股东干预。大多数散户投资者不会在代理权竞争中投票。这可能会让基金董事会在很大程度上自由地追求自己的议程。</blockquote> “Activism plays an important role, and if this bill passes, it will become more difficult for activists to threaten or create changes,” says Matt Buffington, a portfolio manager at Dryden Capital, an activist hedge fund.<blockquote>“激进主义发挥着重要作用，如果这项法案获得通过，激进分子将更难威胁或创造变革，”激进主义对冲基金德莱顿资本（Dryden Capital）的投资组合经理马特-巴芬顿（Matt Buffington）说。</blockquote> Gregory Neer, a portfolio manager with Relative Value Partners, an advisory firm that invests in closed-end funds, agrees. “The ability for investors to pressure funds is beneficial to all shareholders,” he says.<blockquote>投资封闭式基金的咨询公司 Relative Value Partners 的投资组合经理 Gregory Neer 对此表示同意。“他说：”投资者向资金施压的能力对所有股东都有好处。</blockquote> Closed-end funds have long been popular with investors due to their high yields and steady distributions. Many use leverage, borrowing money at market rates to boost payouts. They also generate income with options strategies and investments in high-yielding areas of the stock and bond markets.<blockquote>封闭式基金因其收益率高、分布稳定等特点，长期以来备受投资者欢迎。许多人使用杠杆，以市场利率借钱来增加支出。他们还通过期权策略以及对股票和债券市场高收益领域的投资产生收入。</blockquote> But the funds have structural drawbacks. Expense ratios are steep, averaging 2.1%, according to Morningstar Direct. And since the funds have a fixed number of shares outstanding, prices reflect market demand for both a fund and its underlying assets. Funds usually trade at a discount to NAV. While it is attractive, in theory, to pay 90 cents for a dollar of assets, investors might never see the extra dime.<blockquote>但这些基金存在结构性缺陷。根据晨星直接的数据，费用率很高，平均为 2.1%。由于这些基金拥有固定数量的流通股，价格反映了市场对基金及其标的资产的需求。基金的交易价格通常低于资产净值。虽然从理论上讲，为一美元的资产支付90美分是有吸引力的，但投资者可能永远不会看到额外的一毛钱。</blockquote> Hedge funds aim to exploit this inefficiency, buying closed-end funds at below-market value. They then pressure fund boards to take steps to lift the funds’ prices. The playbook is straightforward: accumulate a stake, win board seats, and then force a fund company into a tender offer, whereby it agrees to repurchase shares at nearly full price.<blockquote>对冲基金旨在利用这种低效率，以低于市场价值的价格购买封闭式基金。然后，他们向基金董事会施压，要求其采取措施提高基金价格。策略很简单：积累股份，赢得董事会席位，然后迫使基金公司提出要约收购，同意以接近全价回购股票。</blockquote> If that fails, a hedge fund might try to replace a fund’s manager, orchestrate a liquidation of the fund, or get it converted to an open-end fund—moves that could also pay off with the share price rising to parity with the NAV. Firms like Saba have also taken over funds entirely.<blockquote>如果失败，对冲基金可能会尝试更换基金经理、安排基金清算，或者将其转换为开放式基金--这些举措也可能在股价上涨至与资产净值持平的情况下获得回报。像Saba这样的公司也完全接管了基金。</blockquote> Giving closed-end funds freedom to own more private securities could throw a wrench into the strategy. Tender offers work only if a fund can liquidate most of its holdings at market prices. Because venture-capital and private-equity holdings generally don’t trade publicly, their pricing isn’t transparent. “When closed-end funds invest in illiquid things, it protects them from activism,” one activist manager tellsBarron’s.<blockquote>给予封闭式基金持有更多私人证券的自由可能会给该战略带来麻烦。只有当基金能够以市场价格清算其大部分持有的股份时，要约收购才有效。由于风险投资和私募股权通常不公开交易，因此它们的定价并不透明。“一位激进主义经理说：”当封闭式基金投资于非流动性资产时，就能保护它们免受激进主义的影响。巴伦.</blockquote> Removing the cap on private-fund ownership is “in line with a legislative agenda of getting retail investors more access to private investments,” says Thomas DeCapo, an attorney for the mutual fund industry.<blockquote>共同基金行业律师托马斯-德卡波（Thomas DeCapo）说，取消私募基金所有权上限 “符合让散户投资者有更多机会获得私人投资的立法议程”。</blockquote> And capping activists at 10% of a fund doesn’t stop them from mounting proxy campaigns. “Nothing about this is antidemocratic,” he says. “It doesn’t stop a majority of investors who are unhappy or want change. It stops one investor from using its economic power, with other people’s money, to basically force changes on everybody else.”<blockquote>将激进分子的份额限制在基金的 10% 并不能阻止他们发起代理人运动。“他说：”这一切都不反民主。“这并不能阻止大多数不满意或希望改变的投资者。它阻止了一个投资者利用自己的经济权力，用别人的钱，基本上迫使其他人做出改变”。</blockquote> Investor advocates see it differently, however, saying fund investors could wind up paying higher fees for funds that hold more-opaque investments. “It’s just another fund-of-funds structure, and those are notoriously high-fee,” says Tyler Gellasch, head of Healthy Markets, an investor-protection group.<blockquote>然而，投资者倡导者有不同的看法，他们表示，基金投资者最终可能会为持有更不透明投资的基金支付更高的费用。“投资者保护组织 Healthy Markets 的负责人泰勒-格拉施（Tyler Gellasch）说：”这只是另一个基金中的基金结构，而且这些基金的费用是出了名的高。</blockquote> Individual hedge funds technically can’t own more than 3% of a closed-end fund, under ownership restrictions in the Investment Company Act of 1940. But they skirt the rule by building stakes through affiliated entities, creating enough of a critical mass to force changes at a fund through proxy voting.<blockquote>根据 1940 年《投资公司法》（Investment Company Act）的所有权限制，从技术上讲，单个对冲基金持有的封闭式基金不得超过 3%。但他们通过附属实体建立股份来规避规则，创造足够的临界质量，通过代理投票迫使基金发生变化。</blockquote> The ICI—the mutual fund industry’s lobby—has tried to persuade regulators to crack down on hedge funds. In a submission to the Securities and Exchange Commission last year, the ICI argued that hedge fund campaigns often consume a fund’s resources, trigger tax liabilities for long-term investors, and result in the forced selling of securities to meet a hedge fund’s demands for a tender offer. A fund’s expense ratio could increase if it is forced to buy back shares and its asset base shrinks.<blockquote>ICI--共同基金行业的游说团体--试图说服监管机构打击对冲基金。在去年提交给美国证券交易委员会的一份文件中，ICI 认为对冲基金活动往往会消耗基金的资源，引发长期投资者的纳税义务，并导致被迫出售证券以满足对冲基金的要约收购要求。如果基金被迫回购股票，而其资产基础缩水，那么基金的费用率可能会上升。</blockquote> The activist community’s “assault” on the industry has had a chilling effect on product launches, the ICI said, resulting in fewer closed-end funds on the market today than in 2007.<blockquote>ICI 表示，激进社区对行业的 “攻击 ”对产品发布产生了寒蝉效应，导致目前市场上的封闭式基金数量少于 2007 年。</blockquote> But hedge funds argue that changing the 1940 act would amount to a power grab by mutual funds. “This is all coming from the mutual fund industry, and it’s no coincidence that this protects them,” says Phil Goldstein, co-founder of Bulldog Investors, an activist that has long targeted closed-end funds. “There are funds with terrible performance and wide discounts. The ICI never says we need a mechanism where shareholders can hold those managers accountable.”<blockquote>但对冲基金认为，修改 1940 年法案将相当于共同基金的权力攫取。“斗牛犬投资者公司（Bulldog Investors）的联合创始人菲尔-戈尔茨坦（Phil Goldstein）说：”这一切都来自共同基金行业，这保护了他们绝非巧合。“有些基金业绩糟糕，折扣幅度很大。ICI 从未说过我们需要一种机制，让股东追究这些经理的责任。”</blockquote> Imposing an ownership cap would also make proxy campaigns less economic. Limited to 10%, hedge funds wouldn’t own enough shares, with sufficient economic interest, to justify the expense of a proxy contest, which can cost millions of dollars. “If you’re limited to 10% and have to spend 2.5% of your assets on a proxy campaign, you’d say it’s too risky,” says Goldstein. “Meanwhile, management isn’t spending anything—just shareholder money. They want to make it economically unattractive to run a proxy contest.”<blockquote>施加所有权上限也会降低代理人竞选活动的经济性。如果被限制在 10%，对冲基金就不会拥有足够的股份，也不会有足够的经济利益来证明代理权争夺的费用是合理的，而代理权争夺可能会花费数百万美元。“戈尔茨坦说：”如果你被限制在 10%，却不得不将 2.5% 的资产用于代理竞选活动，你会说这太冒险了。“与此同时，管理层什么都不花--只是股东的钱。他们想让代理权竞争在经济上变得没有吸引力”。</blockquote> Regulators and courts have expressed skepticism about some defenses that closed-end funds have adopted to prevent shareholder challenges. And, the SEC might not side with the fund industry. Since 2010, the SEC has warned fund companies against using state securities laws to thwart hedge fund takeovers. The SEC dropped its objection to these state “control share” laws last year under its Republican chairman, Jay Clayton. But the new, Democratic chairman, Gary Gensler, might reinstate the SEC’s objection—a reason for the industry to enlist Congress to change the law. The SEC didn’t respond to requests for comment.<blockquote>监管机构和法院对封闭式基金为防止股东挑战而采取的一些辩护措施表示怀疑。而且，美国证券交易委员会可能不会站在基金业一边。自2010年以来，美国证券交易委员会一直警告基金公司不要利用州证券法阻挠对冲基金收购。去年，在共和党主席杰伊-克莱顿（Jay Clayton）的领导下，美国证券交易委员会放弃了对这些州 “控制份额 ”法律的反对。但民主党新任主席加里-根斯勒（Gary Gensler）可能会恢复美国证券交易委员会的反对意见--这也是该行业争取国会修改法律的理由。美国证券交易委员会没有回应置评请求。</blockquote> Institutional Shareholder Services,a firm that makes recommendations on proxy voting, says investors should reject fund companies’ use of state control-share laws, which limit the voting rights of shareholders. With the SEC on the sidelines, ISS says, “CEF shareholders are denied important voting rights and are subject to management entrenchment.”<blockquote>机构股东服务公司（Institutional Shareholder Services）是一家就代理投票提出建议的公司，该公司表示，投资者应拒绝基金公司利用限制股东投票权的州控股法。ISS 表示，由于美国证券交易委员会（SEC）置身事外，“CEF 股东被剥夺了重要的投票权，并受到管理层的巩固”。</blockquote> <img src=\"https://static.tigerbbs.com/70323ed9daef142f19afd48be72b6299\" tg-width=\"755\" tg-height=\"334\" referrerpolicy=\"no-referrer\"><img src=\"https://static.tigerbbs.com/68beb47d59eb02e90b04eb7093f9f17b\" tg-width=\"759\" tg-height=\"285\" referrerpolicy=\"no-referrer\">Hedge funds don’t always win, but investors might want to ride along as activists build a stake. “When an activist comes in, you usually see an increase in the share price and a decrease in the discount,” says Matt Souther, an associate finance professor at the University of South Carolina.<blockquote>对冲基金并不总是能赢，但投资者可能希望在激进分子入股时顺风顺水。“南卡罗来纳大学金融学副教授马特-索瑟（Matt Souther）说：”当激进分子进来时，你通常会看到股价上涨，折扣减少。</blockquote> Templeton Global Income’s (ticker: GIM) discount to NAV could narrow further if Saba acquires more shares or tries to take over the fund’s $743 million in assets. Saba recently took over management of another fund, Voya Prime Rate Trust, which it rebrandedSaba Capital Income &amp; Opportunities(BRW).Franklin Templetonand Saba declined to comment.<blockquote>如果 Saba 收购更多股份或试图接管该基金 7.43 亿美元的资产，邓普顿全球收入公司（股票代码：GIM）对资产净值的折扣可能会进一步缩小。Saba 最近接管了另一只基金 Voya Prime Rate Trust 的管理权，并将其更名为 Saba Capital Income &amp; Opportunities (BRW)。富兰克林邓普顿和 Saba 拒绝置评。</blockquote> Miller/Howard High Income Equity(HIE) is also in Saba’s crosshairs. The fund is a “term trust” with a mandated liquidation date in 2024. It trades at a 5.9% discount to NAV. “In a worst-case scenario, you buy it at a discount and you’ll earn an excess return from now to 2024 because that discount will narrow,” says Patrick Galley, co-manager ofRiverNorth Opportunities(RIV), a closed-end fund that owns HIE.<blockquote>Miller/Howard High Income Equity（HIE）也是 Saba 的目标。该基金是一个 “定期信托”，规定清算日期为 2024 年。其交易价格较资产净值折扣 5.9%。“拥有 HIE 的封闭式基金 FriverNorth Opportunities（RIV）的联席经理帕特里克-加利（Patrick Galley）说：”在最坏的情况下，你会以折扣价买入，从现在到 2024 年，你将获得超额回报，因为折扣价会缩小。</blockquote> Other closed-end funds in which Saba owns stakes includeSource Capital(SOR) andInvesco Dynamic Credit Opportunities(VTA). Bulldog has built a position inTortoise Energy Independence(NDP).<blockquote>Saba 持有股份的其他封闭式基金包括 Source Capital (SOR) 和 Vesco Dynamic Credit Opportunities (VTA)。Bulldog 已经在 inTortoise Energy Independence (NDP) 建立了自己的地位。</blockquote> Some closed-end funds look attractive on their fundamentals.Adams Diversified Equity(ADX) offers exposure to big tech stocks, trades at a 14% discount to NAV, and is committed to an annualized distribution of at least 6%. “For investors who expect tech to do well, ADX is a good holding,” says David Tepper, a closed-end investor and head of Tepper Capital Management in San Francisco.<blockquote>一些封闭式基金的基本面看起来很有吸引力。 Adams Diversified Equity (ADX) 提供大型科技股的投资，交易价格较资产净值折扣 14%，并承诺年化分配至少为 6%。“旧金山封闭式投资者、泰珀资本管理公司（Tepper Capital Management）负责人大卫-泰珀（David Tepper）说：”对于期望科技股表现良好的投资者来说，ADX 是一个不错的持股选择。</blockquote> Sprott Focus Trust(FUND) is another fund he likes. Veteran small-cap manager Whitney George runs it, and his family owns 45% of the shares. It trades at a 10% discount and yields 5.7%. Tepper also favorsRoyce Global Value Trust(RGT), trading at a 9% discount and yielding 7.9%.<blockquote>Sprott Focus Trust（基金）是他喜欢的另一只基金。资深小盘股经理惠特尼·乔治 (Whitney George) 经营该公司，他的家族拥有 45% 的股份。它的交易折扣为 10%，收益率为 5.7%。泰珀还青睐罗伊斯全球价值信托 (RGT)，其交易折扣为 9%，收益率为 7.9%。</blockquote> None of these funds has attracted much activist involvement, according to securities filings. But if activists see opportunity, they could pile in and pressure fund management—assuming that Congress doesn’t rewrite the rules of engagement.<blockquote>根据证券文件，这些基金都没有吸引太多活动人士的参与。但是，如果激进分子看到了机会，他们可能会蜂拥而至，向基金管理部门施压--前提是国会不改写交战规则。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.marketwatch.com/articles/congress-closed-end-funds-legislation-51627657959?mod=newsviewer_click\">Barron's</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.marketwatch.com/articles/congress-closed-end-funds-legislation-51627657959?mod=newsviewer_click","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1138566016","content_text":"TheTempleton Global Incomefund frustrated investors for years. Despite star manager Michael Hasenstab at the helm, the closed-end fund returned an average of 0.3% annually in the past decade, versus an average 7% for peers in global income. Also frustrating, its shares rarely traded close to the fund’s underlying net asset value, or NAV. The discount averaged 11% in the past three years.\nInvestors have caught a break, however, thanks to Saba Capital Management, a hedge fund shop run by activist investor Boaz Weinstein. Saba amassed a 20% stake in the Templeton fund and recently won four contested board seats. It has been pressuring the board to take actions to boost the share price. Its moves have paid off: The fund has returned a total 4.5% this year as its share price improved, and the discount to NAV has shrunk to 4%.\nTactics like Saba’s have long infuriated mutual fund companies; no one wants a hedge fund threatening a coup. Now, with some help from Congress, the playing field could tilt in favor of closed-end funds and their company sponsors, due to a bill recently introduced in the House. That could work against the interests of fund investors.\nThe Increasing Investor Opportunities Act, introduced in June by Rep. Anthony Gonzalez (R., Ohio) and Rep. Gregory Meeks (D., New York), includes two measures that could make it much tougher for hedge funds to pressure closed-end funds and win proxy fights. One proposed change would lift the current 15% limit on closed-end-fund ownership of illiquid private funds, such as venture-capital and private-equity funds. A second measure would prevent activist hedge funds from acquiring more than 10% of a closed-end fund’s shares.\nA spokesman for Gonzalez declined to comment. Meeks didn’t respond to requests for comment.\nProponents of the changes say they would expand access to private markets for retail investors. They also say hedge funds are exploiting gaps in securities laws at a cost to long-term shareholders, saddling them with tax liabilities, higher fees, and forced fund liquidations. The bill would eliminate a “loophole that activist investors have used to extract short-term profits at the expense of retail investors,” the Investment Company Institute, or ICI, said in a recent statement.\nHedge funds and portfolio managers who invest in closed-end funds say that mutual fund companies are simply trying to protect a pool of assets and fees from shareholder interference. Most retail investors don’t vote their shares in proxy contests. That may leave fund boards largely free to pursue their own agendas.\n“Activism plays an important role, and if this bill passes, it will become more difficult for activists to threaten or create changes,” says Matt Buffington, a portfolio manager at Dryden Capital, an activist hedge fund.\nGregory Neer, a portfolio manager with Relative Value Partners, an advisory firm that invests in closed-end funds, agrees. “The ability for investors to pressure funds is beneficial to all shareholders,” he says.\nClosed-end funds have long been popular with investors due to their high yields and steady distributions. Many use leverage, borrowing money at market rates to boost payouts. They also generate income with options strategies and investments in high-yielding areas of the stock and bond markets.\nBut the funds have structural drawbacks. Expense ratios are steep, averaging 2.1%, according to Morningstar Direct. And since the funds have a fixed number of shares outstanding, prices reflect market demand for both a fund and its underlying assets. Funds usually trade at a discount to NAV. While it is attractive, in theory, to pay 90 cents for a dollar of assets, investors might never see the extra dime.\nHedge funds aim to exploit this inefficiency, buying closed-end funds at below-market value. They then pressure fund boards to take steps to lift the funds’ prices. The playbook is straightforward: accumulate a stake, win board seats, and then force a fund company into a tender offer, whereby it agrees to repurchase shares at nearly full price.\nIf that fails, a hedge fund might try to replace a fund’s manager, orchestrate a liquidation of the fund, or get it converted to an open-end fund—moves that could also pay off with the share price rising to parity with the NAV. Firms like Saba have also taken over funds entirely.\nGiving closed-end funds freedom to own more private securities could throw a wrench into the strategy. Tender offers work only if a fund can liquidate most of its holdings at market prices. Because venture-capital and private-equity holdings generally don’t trade publicly, their pricing isn’t transparent. “When closed-end funds invest in illiquid things, it protects them from activism,” one activist manager tellsBarron’s.\nRemoving the cap on private-fund ownership is “in line with a legislative agenda of getting retail investors more access to private investments,” says Thomas DeCapo, an attorney for the mutual fund industry.\nAnd capping activists at 10% of a fund doesn’t stop them from mounting proxy campaigns. “Nothing about this is antidemocratic,” he says. “It doesn’t stop a majority of investors who are unhappy or want change. It stops one investor from using its economic power, with other people’s money, to basically force changes on everybody else.”\nInvestor advocates see it differently, however, saying fund investors could wind up paying higher fees for funds that hold more-opaque investments. “It’s just another fund-of-funds structure, and those are notoriously high-fee,” says Tyler Gellasch, head of Healthy Markets, an investor-protection group.\nIndividual hedge funds technically can’t own more than 3% of a closed-end fund, under ownership restrictions in the Investment Company Act of 1940. But they skirt the rule by building stakes through affiliated entities, creating enough of a critical mass to force changes at a fund through proxy voting.\nThe ICI—the mutual fund industry’s lobby—has tried to persuade regulators to crack down on hedge funds. In a submission to the Securities and Exchange Commission last year, the ICI argued that hedge fund campaigns often consume a fund’s resources, trigger tax liabilities for long-term investors, and result in the forced selling of securities to meet a hedge fund’s demands for a tender offer. A fund’s expense ratio could increase if it is forced to buy back shares and its asset base shrinks.\nThe activist community’s “assault” on the industry has had a chilling effect on product launches, the ICI said, resulting in fewer closed-end funds on the market today than in 2007.\nBut hedge funds argue that changing the 1940 act would amount to a power grab by mutual funds. “This is all coming from the mutual fund industry, and it’s no coincidence that this protects them,” says Phil Goldstein, co-founder of Bulldog Investors, an activist that has long targeted closed-end funds. “There are funds with terrible performance and wide discounts. The ICI never says we need a mechanism where shareholders can hold those managers accountable.”\nImposing an ownership cap would also make proxy campaigns less economic. Limited to 10%, hedge funds wouldn’t own enough shares, with sufficient economic interest, to justify the expense of a proxy contest, which can cost millions of dollars. “If you’re limited to 10% and have to spend 2.5% of your assets on a proxy campaign, you’d say it’s too risky,” says Goldstein. “Meanwhile, management isn’t spending anything—just shareholder money. They want to make it economically unattractive to run a proxy contest.”\nRegulators and courts have expressed skepticism about some defenses that closed-end funds have adopted to prevent shareholder challenges. And, the SEC might not side with the fund industry. Since 2010, the SEC has warned fund companies against using state securities laws to thwart hedge fund takeovers. The SEC dropped its objection to these state “control share” laws last year under its Republican chairman, Jay Clayton. But the new, Democratic chairman, Gary Gensler, might reinstate the SEC’s objection—a reason for the industry to enlist Congress to change the law. The SEC didn’t respond to requests for comment.\nInstitutional Shareholder Services,a firm that makes recommendations on proxy voting, says investors should reject fund companies’ use of state control-share laws, which limit the voting rights of shareholders. With the SEC on the sidelines, ISS says, “CEF shareholders are denied important voting rights and are subject to management entrenchment.”\nHedge funds don’t always win, but investors might want to ride along as activists build a stake. “When an activist comes in, you usually see an increase in the share price and a decrease in the discount,” says Matt Souther, an associate finance professor at the University of South Carolina.\nTempleton Global Income’s (ticker: GIM) discount to NAV could narrow further if Saba acquires more shares or tries to take over the fund’s $743 million in assets. Saba recently took over management of another fund, Voya Prime Rate Trust, which it rebrandedSaba Capital Income & Opportunities(BRW).Franklin Templetonand Saba declined to comment.\nMiller/Howard High Income Equity(HIE) is also in Saba’s crosshairs. The fund is a “term trust” with a mandated liquidation date in 2024. It trades at a 5.9% discount to NAV. “In a worst-case scenario, you buy it at a discount and you’ll earn an excess return from now to 2024 because that discount will narrow,” says Patrick Galley, co-manager ofRiverNorth Opportunities(RIV), a closed-end fund that owns HIE.\nOther closed-end funds in which Saba owns stakes includeSource Capital(SOR) andInvesco Dynamic Credit Opportunities(VTA). Bulldog has built a position inTortoise Energy Independence(NDP).\nSome closed-end funds look attractive on their fundamentals.Adams Diversified Equity(ADX) offers exposure to big tech stocks, trades at a 14% discount to NAV, and is committed to an annualized distribution of at least 6%. “For investors who expect tech to do well, ADX is a good holding,” says David Tepper, a closed-end investor and head of Tepper Capital Management in San Francisco.\nSprott Focus Trust(FUND) is another fund he likes. Veteran small-cap manager Whitney George runs it, and his family owns 45% of the shares. It trades at a 10% discount and yields 5.7%. Tepper also favorsRoyce Global Value Trust(RGT), trading at a 9% discount and yielding 7.9%.\nNone of these funds has attracted much activist involvement, according to securities filings. But if activists see opportunity, they could pile in and pressure fund management—assuming that Congress doesn’t rewrite the rules of engagement.","news_type":1,"symbols_score_info":{}},"isVote":1,"tweetType":1,"viewCount":2987,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":5,"subscribersOnly":false,"subscribersOnlyAccessible":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/802940313"}