MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Wednesday, December 11, 2002 Franklin and Harvard in Row Franklin Templeton is fighting back against Harvard University. The San Mateo, California-based fund firm is not pleased the Harvard's president penned a proposal calling for shareholders of the closed-end fund to fire Franklin as the advisor to the closed-end Templeton Dragon Fund. The fund, which specializes in investing in Asian emerging markets, has been plagued by poor absolute performance and has traded at a steep discount to its NAV. In response, shareholders added proposed that the fund be converted from a pure closed-end fund to an interval fund. The hope being that the interval fund structure would shrink the discount. Franklin opposed that proposal and it was defeated in a shareholder vote last September. Now Harvard, a large shareholder in the fund, thinks that the discount can be narrowed if Franklin is fired. Today, Franklin shot back in a letter to the fund shareholders. The fund firm also said it plans to file a proxy statement in support of its position with the SEC. In the letter Franklin claimed that Harvard's position is self-serving and a short-term tactic intended to strong the fund directors into open-ending the fund. "Although conversion to an open-end fund or substantial share buy-backs, at or near net asset value, could eliminate or produce a short-term narrowing of the discount, the Board of the Fund must consider whether these actions may be more in the interests of shareholders seeking short-term profits than those seeking long-term capital appreciation. In less liquid markets, a closed-end fund can be managed with a view toward achieving long-term portfolio returns without the need to provide short-term liquidity in its investments, which is one of the key advantages of a closed-end fund." To read the complete letter click here. Printed from: MFWire.com/story.asp?s=4153 Copyright 2002, InvestmentWires, Inc. All Rights Reserved |